Skip to main content

Full text of "Martin Bor­mann: Nazi in Exile"

See other formats


MARTIN 
BORMANN 

® 

NAZI IN EXILE 



By Paul Manning 



[FACSIMILE ELECTRONIC EDITION 2005] 



First edition 
Copyright © 1981 by Paul Manning 
All rights reserved. No part of this book may be 
reproduced in any form except by a newspaper 
or magazine reviewer who wishes to quote 
brief passages in connection with a review. 

Queries regarding rights and permissions 
should be addressed to: 
Lyle Stuart Inc., 
120 Enterprise Ave., Secaucus, N. J. 07094 
Published by Lyle Stuart Inc. 
Published simultaneously in Canada by 
Musson Book Company, a division of 
General Publishing Co. Limited, Don Mills, Ont. 
Manufactured in the United States of America 



Library of Congress Cataloging in Publication Data 

Manning, Paul. 

Martin Bormann, Nazi in exile. 

Includes index. 

1. Bormann, Martin, 1900-1943[?]. 2. National 
socialism — Biography. 3. War criminals — Germany — 
Biography. I. Title. 

DD247.B65M36 943.086'092'4 [B] 81-5696 
ISBN 0-8184-0309-8 AACR2 



To my wife, Peg, and to our four sons, 
Peter, Paul, Gerald and John, whose 
collective encouragement and belief in 
this book as a work of historic impor- 
tance gave me the necessary persistence 
and determination to keep going 



ACKNOWLEDGMENTS 



To Allen W. Dulles, for his encouragement and assurance 
that I was "on the right track, and should keep going," after 
reading my German research notes in preparation for this book, 
during the afternoons we talked in his house on Q__Street in 
Washington, D.C. 

To Robert W. Wolfe, director of the Modern Military 
Branch of the National Archives in Washington, his associate 
John E. Taylor, and George Chalou, supervisor of archivists in 
the Suitland, Maryland, branch of the National Archives, whose 
collective assistance in my search for telling documents from 
both sides of World War II contributed substantially to the his- 
torical merits of this book 

To those retired agents of the U.S. Treasury Department 
whose reports and files brought into focus the magnitude of 
Martin Bormann's campaign to shift the liquid assets of 
Germany to neutral nations during the last months of the war. 

To those German nationals who, for the sake of history and 
to set the record straight about the leader they believe was the 
mainspring of West Germany's postwar recovery, contributed to 
my knowledge and insights into the remarkable Bormann 
organization. 



ILLUSTRATIONS 



Following page 96: 

Bormann and Hitler at Berchtesgaden. 

Eva Braun when she was secretary to Hitler's personal photog- 
rapher. 

A party celebrating Hitler's birthday, April 20, 1938. 
Four photographs of the firebombing of London taken by the 
author. 

Nazi Reich State Security Bureau (Gestapo) SS General Hein- 
rich Mueller. 

Purported grave of General Mueller in Berlin. 

Fritz Thyssen, the Ruhr industrialist and early Hitler support- 
er. 

Following page 192: 

Hans Bernd Gisevius, a German underground leader, giving 

testimony at Nuremberg. 
Allen Welsh Dulles when he was Roosevelt's personal emissary 

to Switzerland. 
Hermann Schmitz, chief executive officer of I.G. Farben. 
Bormann's capitulation message to Grand Admiral Doenitz. 
Travel permit of Hans (Juan) Baumann, friend of Martin 

Bormann, from the files of the FBI. 
A confidential memo from J. Edgar Hoover regarding 

Baumann. 

A joint bank account shared by Bormann and Juan Peron. 

Bormann's eldest son, Adolph. 

Hermann Schmitz being sentenced at Nuremberg. 

The author with Dr. Hermann J. Abs, Honorary President of 

Deutsche Bank A.G. 
Paul Manning as a CBS news correspondent during World 

War II. 



PREFACE 



DID THE WORLD EVER REALLY KNOW MARTIN 
Bormann? A man of indescribably vast power and the sole 
trustee of Hitler's secrets after May 1, 1945, in the Berlin 
bunker, Bormann continues to be the most controversial, per- 
plexing figure of our times. There are those who wish him dead 
and continue to claim he is; for were he to emerge, it would 
embarrass the governments that assisted in his escape, the 
industrial and financial leaders who benefited from his acumen 
and transferred their capital to neutral nations in the closing 
days of World War II, and the businessmen of four continents 
who profited from the 750 corporations he established through- 
out the world as depositories of money, patents, bearer bonds, 
and shares in blue chip industries of the United States and 
Europe. 

There are also those who know he is not dead, and I am 
among those who hold this belief. When I penetrated the 
silence cloaking this story, after countless interviews and labori- 
ous research in German and American archives for revealing 
documents of World War II, I knew that the Bormann saga of 
flight capital and his escape to South America was really true. 
It had been covered up by an unparalleled manipulation of pub- 
lic opinion and the media. The closer I got to the truth, the 
more quiet attention I received from the forces surrounding and 
protecting Martin Bormann, and also from those who had a 
direct interest in halting my investigation. Over the period of 
years it took to research this book, I was the object of diligent 
observation by squads of Gestapo agents dispatched from South 
America by General "Gestapo" Mueller, who directs all securi- 
ty matters for Martin Bormann, Nazi in exile, and his organi- 
zation, the most remarkable business group anywhere in the 
secret world of today. Mueller's interest in me, an American 



11 



journalist, confirmed the truth of my many interviews and my 
ongoing investigation: Bormann is alive, they don't want waves, 
so they have been willing to expend immense time and money 
in tracking me and my progress. 

There are also those in international government and business 
who have attempted to stop my forward movement on this inves- 
tigation. In Germany, France, England, and the United States, 
too many leaders in government and finance still adhere to 
Winston Churchill's statement to his Cabinet in 1943: "In 
wartime, truth is so precious that she should always be attended 
by a bodyguard of lies." For these leaders act as if the war is still 
on, especially when they are trying to protect their flanks, their 
wealth, and their influential peers in government, business, and 
banking. The West German government fears this story will 
emerge and will do harm to its growing prestige, which is really 
the one resounding victory the German nation can point to with 
pride. Yet because they are unsure how it will be received by their 
allies of today, and because many in the Federal Republic of 
Germany bear the burdens of war guilt, the prudent course, they 
believe, is silence, and, when necessary, the implied intimidation 
of publishers and literary agents who might be tempted to run 
with this story. But Martin Bormann, Nazi in Exile, is a great 
slice of true history whose time has come for publication. 

Oddly, I encountered less resistance from Martin Bormann 
and his aging peers than I did from the cover-up groups in West 
Germany, Paris, London, Washington, and Wall Street. Bor- 
mann knows he is mortal, as are his cronies who have turned 
over the day-to-day direction of the Bormann organization to a 
younger leadership. The old guard want the story told, and the 
only point of friction is whether it should be before or after 
Fuehrer Bormann's demise. 

The investigation into this historical account begins at the 
Nuremberg trials, when the Tribunal appointed H. Trevor 
Roper, the Oxford don and author of The Last Days of Hitler, 
to investigate the alleged death of Martin Bormann. Roper was 
to comment that giving in to death was not part of the 
Reichsleiter's game plan: "There was at least one man in the 
bunker who thought only of living — Martin Bormann." 

In La Fin de Hitler, Gerhard Bolat, a French historian, de- 



12 



scribed Bormann in those last days of downfall as "immune from 
the general hysteria; calm and undismayed in the midst of mad- 
men, as though this 'Twilight of the Gods' was no affair of 
his, as though the sun would always rise for him, and intriguing 
up to the last." 

Martin Bormann was last seen for sure in a tank crossing the 
Weidendamm Bridge in Berlin, on the night of May 1, 1945. 
Then, for most of the world, he vanished. 

Nor are the Russians convinced that Bormann died in Berlin. 
The Soviet KGB assigned a Major L. Besymenski in the late 
1960s to probe the "death or escape" of Bormann. After two 
years of painstaking investigation, his report On the Trail of 
Martin Bormann concluded that there was a successful escape to 
South America. 

The U.S. CIA, on the other hand, theorized that the Reichs- 
leiter had succumbed to shellfire as he fled the bunker. 
Staunchly insisting this was so, the CIA, for some unexplained 
policy reason, advanced, promoted, and encouraged this belief. 
They intervened, for instance, when General Reinhard Gehlen 
was arranging to publish his memoirs. Gehlen had run the 
German espionage network in Russia during World War II, and 
later, under Chancellor Konrad Adenauer during the cold war 
years, had served as chief of the German Federal Intelligence 
Service. The CIA obliged him to include a statement that 
Martin Bormann had been a Kremlin spy, and had died in 
Russia in 1969! I am told that the general complied with reluc- 
tance, but was indebted to the CIA; during the cold war they 
had funded his Eastern Europe/Soviet spy operation of 4,000 
men at an annual cost to the U.S. taxpayers of around $6 mil- 
lion. Back in 1953, his Bureau Gehlen had turned heaven and 
earth upside down for clues to Bormann's whereabouts in the 
East, reporting officially: "Bormann is not in East Germany or 
the Soviet Union. The Bureau has been unable to discover what 
happened to him after he left the Reich Chancellery." Gehlen's 
credibility in knowledgeable West German political and espi- 
onage circles was damaged by this circumlocution. Called to 
Bonn to explain, he in essence retracted his statement. 

My own West German sources have told me: "The CIA was 
behind the General Gehlen statement. It was a manipulation of 



13 



public opinion by the CIA, immediately obvious to anyone who 
knows anything about this subject. Bormann and his links to 
Germany today are a hidden but a very real political issue." H. 
Trevor Roper commented about the Gehlen af fair: "For this 
story there is neither evidence nor probability. Had it been true, 
it was Gehlen's duty to report it long ago; and his belated 'rev- 
elation' has only damaged his own credibility." 

In U.S. academe, Professor Male Fainsode, Harvard histori- 
an and author of How Russia Is Ruled, commented on the 
Gehlen statement: "There is no information available among 
Russian scholars, so far as I know, to support or deny the pres- 
ence of Bormann in the Soviet Union." 

Grand Admiral Doenitz, at home in Kiel, was among those 
who doubted that Bormann had either considered being a Soviet 
agent or was making his way to Russia. Simon Wiesenthal, 
director of the Jewish Documentation Center in Vienna, like- 
wise considers Gehlen's statement "nonsense." Wiesenthal has 
stated that his "last credible information confirms Bormann's 
presence near the village of Ibiruba, near the Paraguayan border 
in the Brazilian province of Rio Grande do Sul." Adolf 
Eichmann, captured by Israeli agents in Argentina in 1960, 
confirmed that Bormann is alive and dwelling in South America. 

In the New York Times in March 1973, 1 wrote, in part: 

Martin Bormann is the Reichsleiter in exile, a legally appointed head 
of state who does not consider himself a war criminal, according to 
spokesmen for him. Much has been written about Bormann in recent 
times; all of it incorrect except for the single fact he is alive and in 
South America. . . . When the true story of Martin Bormann is writ- 
ten it will reveal him to be the man largely responsible for West 
Germany's postwar recovery. . . . If he is ever to come out into the 
open and live the life of a free man once again, he must refute the 
charges of Nuremberg, where he was tried in absentia in 1945-46 and 
found not guilty on the charge of crimes against peace, but guilty of 
war crimes and crimes against humanity. In its decision, the 
International Military Tribunal left a loophole for Martin Bormann if 
he ever wishes to reopen the case. . . . "If Bormann is not dead," the 
Tribunal stated, "and is later apprehended, the Control Council for 
Germany may, under Article 29 of the Charter, consider any facts in 
mitigation, and alter or reduce his sentence, if deemed proper." 



14 



I concluded my article: 



Will Martin Bormann, an unquestioned genius of finance and admin- 
istration, take the gamble, or continue to be the most hunted man in 
history? 

At the Nuremberg Trials, Dr. Friedrich Bergold, the wily 
counsel for this defendant, thought to cut through all attempts 
to try the absent Reichsleiter with this statement: 

Your Lordship, your Honors, the case of the defendant Martin 
Bormann, whose defense the Tribunal has commissioned me to 
undertake, is an unusual one. When the sun of the National Socialist 
Reich was still at its zenith, the defendant lived in the shade. Also 
during this Trial he has been a shadowy figure, and in all probability, 
he has gone down to the shades — that abode of departed spirits, 
according to the belief of the ancients. He alone of the defendants is 
not present, and Article 12 of the Charter applies only to him. It 
seems as though history wanted to preserve the continuity of the 
genius loci and have chosen the town of Nuremberg to be the scene of 
a discussion as to whether the fact that a defendant is allegedly no 
longer alive can obstruct his being tried in absentia. In Nuremberg, we 
have an adage which has come down to us from the Middle Ages, and 
which says: "The Nurembergers would never hang a man they did not 
hold." Thus, even in former times they had an excellent way in 
Nuremberg of dealing with the question as to how proceedings can be 
taken against a person in his absence. 

In 1972 the eighty- five-year-old bishop of Munich, Johannes 
Neuhausler, made public a document of the Roman Catholic 
Church, which stated that Bormann had escaped to Spain. The 
document said, in part: "Albert Bormann had awaited the re- 
turn of his brother Martin to Munich, and they fled from 
Salzburg airport. The airport had not been destroyed and there 
were also at least ten flights from there of the Fuehrer's mes- 
sengers with of ficial documents. All aircraft were suitable for 
night and long distance flights." The bishop made the foregoing 
statement to prove that "Bormann had enough ways and means 
to flee Germany, and that the Vatican had not done anything 
special to help him." 

In 1973 the West German government of Willy Brandt, in 



15 



collusion with the CIA, acted to end for all time the speculation 
that Bormann is still alive. It held a press conference in 
Frankfurt to declare that Martin Bormann had died in Berlin on 
the night of May 1-2, 1945. It displayed a skull alleged to be 
that of Bormann. On December 8, 1972, a crew of ditchdiggers 
had unearthed two skeletons near the ruins of Berlin's Lehrter 
railway station. Investigators had tried to locate these remains 
seven years earlier, but now quite by accident, it seemed, they 
were found just 20 yards from the previous ef fort. A faded mil- 
itary pass on the second body identified it as that of Dr. Ludwig 
Stumpfegger, Hitler's physician, who had left the 
Fuehrerbunker with Bormann in 1945. 

Bormann's dental record, prepared from memory in 1945 by 
Dr. Hugo Blaschke on order of a U.S. Army investigation team, 
was produced at the Frankfurt press conference, along with a 
skull. Dr. Blaschke had been personal dentist to Hitler, Eva 
Braun, and Martin Bormann. Prudently, before the Russians 
took Berlin, he had moved to Munich. He had died in 1957. 
Chief testimony was by Fritz Echtmann, a dental technician 
who had made fittings for these three; he testified that the den- 
tal work in the skull was that of the missing Reichsleiter. So we 
have two items of proof: first, dental data prepared from mem- 
ory by Bormann's dentist who had been loyal for many years to 
Hitler and Bormann; and, second, the statement of a dental 
technician, who had suffered imprisonment in Russia because of 
his knowledge of dental work on Hitler and Bormann. 

H. Trevor Roper, Regius Professor of Modern History at 
Oxford University, commented as recently as January 14, 1973, 
in the New York Times: "I have my own reasons for thinking 
that Bormann may well have escaped to Italy and thence to 
South America. On the present balance of evidence it is quite pos- 
sible that Bormann is still alive." B ut he seemed to alter his opinion 
somewhat in 1974 after viewing the dental evidence presented to him 
by Dr. Reidar F. Sognnaes, the American forensic dental specialist. 
Dr. Roper stated to Dr. Sognnaes that, on the basis of the Berlin skull 
discovery, said to be that of Bormann: " In consequence of that dis- 
covery, and the identification which I presume to be bona fide [italics 
mine], that the balance of probability has shifted; and that so far 
I have seen no evidence that can shift it back." Yet Simon 



16 



Wiesenthal was also present at the Frankfurt press display and 
expressed doubt that the skull he saw was that of Bormann. 
"There seemed to be a slight dif ference in the skull structure 
from that of Bormann," he mused. 

Mr. Wiesenthal had gone to the heart of the matter, perhaps 
unknowingly. For the alleged Bormann skull is that of a grisly 
stand-in, a substitute whose teeth and entire dental structure 
had been carefully prepared over a period of time on an inmate 
of Concentration Camp Sachsenhausen who looked almost like 
the Reichsleiter — a resemblance that Wiesenthal perceived as 
not quite 100 percent. 

Substituting one body for another has been a ploy much used 
by General Heinrich Mueller of the Gestapo. It was he who 
coordinated the details of Bormann's disappearance. This is 
according to statements made to me by separate individuals 
working for three different intelligence services: the Berlin skull 
is from a body placed in the location of the freight yards on 
April 30, 1945, by an SS Gestapo team commanded by General 
Mueller of the Waffen SS. Their account is retold in Chapter 6. 
Furthermore, another authority on Bormann has since told me 
(in 1977): "Bormann planned this flight with extreme care, and 
part of the grand design was a scheme to lead future forensic 
and dental specialists astray." 

The London Daily Express termed the Frankfurt press con- 
ference by the Brandt government a whitewash, and said it was 
Bormann's passport to freedom in perpetuity, forever freeing 
him from harassment or capture. The European press held that 
a deal was made between representatives of the Bormann 
NSDAP* in exile in South America and the government of the 
Federal Republic of Germany. Their speculation was that by so 
doing the government sought to free itself from the unending 
nagging pressure of continuing to search for Bormann. As a 
result of the Frankfurt press conference, Bormann was, with 
worldwide trumpeting, declared dead. Dr. Horst Gauf f, state 
prosecutor for Hesse, removed the West German warrant for 
Bormann's arrest and the reward of $36,000 for Bormann's cap- 
ture. Abroad, West German embassies and consulates were 
directed to ignore any future reports: 

*NSDAP: Nationalsozialistische Deutsche Arbeiterpartei National Socialist 
German Workers' Party — the Nazi Party). 



17 



"If anyone is arrested on suspicion that he is Bormann we will 
be dealing with an innocent man." 

Has tranquility come to this man of the shadows? It is un- 
likely, for there are too many glory days to remember, along with 
the certainty that he dare not go home to Germany, despite the 
economic victory he achieved for the Fatherland. 

His wife, Gerda, whom he married in 1929, opened a nursery 
home for Jewish orphans in Bavaria in 1945. U.S. Army intelli- 
gence officers who discovered this wanted to throw her in prison; 
she was spared this because she was terminally ill, and died in 
March 1946 in the infirmary of an Italian monastery at Merano. 
General Patton vetoed jailing her: "Let her be. She will meet her 
maker soon enough." She appointed a Roman Catholic priest as 
executor of her will and as guardian of her ten children. The eld- 
est, Adolf Martin, named for his godfather, Adolf Hitler, 
became a Jesuit priest, serving the order for years in the Congo. 
He asked for reassignment to South America, and the request 
went to the Vatican because of his father's prominence in histo- 
ry; the request was denied, for Vatican officials felt that it was no 
coincidence. It was assumed that Martin Bormann in exile 
missed his children and had requested his eldest son to join him 
in South America. Approval would have cast a spotlight of dis- 
affection on the Vatican. Denied, Adolf Bormann resigned from 
the priesthood, subsequently married a former nun, Cordula, and 
today they are working together as missionaries to the Indians of 
Brazil and Bolivia. Can it not be thought that he visits Bormann, 
Senior, in his last years? 

The flame flickers low, but "Whatever became of Martin 
Bormann?" is unceasingly engrossing. My wartime CBS col- 
league, the late Edward R. Murrow, had talked at length with 
me about developing the Bormann saga as a solid and histori- 
cally enlightening, valuable postwar story. 

When Reichsleiter Martin Bormann, through an emissary, 
informed a gathering of Nazi industrialists in Strasbourg on 
August 10, 1944, "The war cannot be won by us; we must take 
steps in preparation for a postwar commercial campaign," he 
made just that possible by putting into action his new German 
state policy: the flight of capital — that is to say, money, patents, 
scientists, administrators — to neutral nations where this wealth 



18 



would develop free of seizure by the Allies. This Bormann pro- 
gram of flight capital to safe havens, together with the endeavors 
of the German people, the grants of Marshall Plan money for 
reconstruction of factories, and the investment money that even- 
tually found its way back home, moved the new West German 
Federal Republic forward to its present prosperity. 

I was impelled to write this book to present to thinking peo- 
ple the verity of modern history's most all-encompassing con- 
spiracy of silence, and to straighten out some of the lingering 
distortions that have developed from the massive outpouring of 
slanted communiques and press releases from governments and 
private interests over the past three decades, until caring people 
everywhere are hard put to tell truth from fiction, with too much 
fiction passing for history. 

PAUL MANNING 

New York 



19 



IT WAS EARLYMORNING AND THE HAZE COVERING 
the broad Alsatian plain was lifting to reveal glistening mountain- 
side acres of wine grapes and the string of fortresses that 
dominate the hillsides and vineyard villages on the road from 
Colmar — fortresses old when Joan of Arc was young. A Mercedes- 
Benz, flying Nazi swastika and SS flags from the front bump- 
ers, was moving at high speed through columns of German 
infantry marching toward Colmar from where the command car 
had come. A mountainous region, some of World War II's 
bitterest fighting was to take place there as winter approached, 
once American divisions had bypassed Paris and moved through 
Metz into the Colmar Gap. 

The staff car had left Colmar at first light for Strasbourg, 
carrying SS Obergruppenfuehrer Scheid, who held the rank of 
lieutenant general in the Waf fen SS, as well as the title of Dr. 
Scheid, director of the industrial firm of Hermadorf f & Schen- 
burg Company. While the beauty of the rolling countryside was 
not lost on Dr. Scheid, his thoughts were on the meeting of 
important German businessmen to take place on his arrival at 
the Hotel Maison Rouge in Strasbourg. Reichsleiter Martin 
Bormann himself had ordered the conference, and although he 
would not physically be present he had confided to Dr. Scheid, 
who was to preside, "The steps to be taken as a result of this 
meeting will determine the postwar future of Germany." The 



23 



Reichsleiter had added, "German industry must realize that the 
war cannot now be won, and must take steps to prepare for a 
postwar commercial campaign which will in time insure the 
economic resurgence of Germany." It was August 10, 1944. 

The Mercedes-Benz bearing SS Obergruppenfuehrer Scheid 
moved slowly now through the narrow streets of Strasbourg. Dr. 
Scheid noticed that this was a most agreeable city, one to return 
to after the war. It was the city where in 1792 the stirring Mar- 
sellaise was composed by Rouget de Lisle, ostensibly for the 
mayor's banquet. The street signs all in French, the names of 
the shops all in German, were characteristic of bilingual Alsace, 
a land that has been disputed throughout known history, par- 
ticularly since the formation of the two nations, Germany and 
France. After World War I, the Treaty of Versailles restored 
Alsace-Lorraine to France, but after the fall of France in World 
War II the Germans reannexed these 5,600 square miles o f 
territory, and life went on as usual, except for the 18,000 Alsa- 
tians who had volunteered to fight for the Third Reich on the 
Eastern Front. 

The staff car drew up before the Hotel Maison Rouge on the 
rue des France-Bourgeois. Dr. Scheid, briefcase in hand, entered 
the lobby and ascended in the elevator to the conference suite 
reserved for his meeting. Methodically he circled the room, 
greeting each of the twelve present, then took his place at the 
head of the conference table. Even the pads and pencils before 
each man had been checked; Waf fen SS technicians had swept 
the entire room, inspecting for hidden microphones and mini- 
ature transmitters. As an additional precaution, all suites flank- 
ing the conference suite had been held unfilled, as had the floors 
above and below, out of bounds for the day. Lunch was to be 
served in the conference suite by trusted Waf fen SS stewards. 
Those present, all thirteen of them, could be assured that the 
thorough precautions would safeguard them all, even the secre- 
tary who was to take the minutes, later to be typed with a copy 
sent by SS courier to Bormann. 

A transcript of that meeting is in my possession. It is a cap- 
tured German document from the files of the U.S. Treasury 
Department, and states who was present and what was said, as 
the economy of the Third Reich was projected onto a postwar 
profit-seeking track. 



24 



Present were Dr. Kaspar representing Krupp, Dr. Tolle repre- 
senting Rochling, Dr. Sinceren representing Messerschmitt, Drs. 
Kopp, Vier, and Beerwanger representing Rheinmetall, Captain 
Haberkorn and Dr. Ruhe representing Bussing, Drs. Ellenmayer 
and Kardos representing Volkswagenwerk, engineers Drose, 
Yanchew, and Koppshem representing various factories in Posen, 
Poland (Drose, Yanchew, &Co., Brown-Boveri, Herkuleswerke, 
Buschwerke, and Stadtwerke); Dr. Meyer, an of ficial of the 
German Naval Ministry in Paris; and Dr. Strossner of the Min- 
istry of Armament, Paris. 

Dr. Scheid, papers from his briefcase arranged neatly on the 
table before him, stated that all industrial materiel in France 
was to be evacuated to Germany immediately. "The battle of 
France is lost to Germany," he admitted, quoting Reichsleiter 
Bormann as his authority, "and now the defense of the Siegfried 
Line (and Germany itself) is the main problem. . . . From now 
on, German industry must take steps in preparation for a post- 
war commercial campaign, with each industrial firm making 
new contacts and alliances with foreign firms. This must be done 
individually and without attracting any suspicion. However, the 
party and the Third Reich will stand behind every firm with 
permissive and financial support." He assured those present that 
the frightening law of 1933 known as Treason Against the 
Nation, which mandated the death penalty for violation of for- 
eign exchange regulations or concealing of foreign currency, was 
now null and void, on direct order of Reichsleiter Bormann. 

Dr. Scheid also af firmed, "The ground must now be laid on 
the financial level for borrowing considerable sums from foreign 
countries after the war." As an example of the kind of support 
that had been most useful to Germany in the past, Dr. Scheid 
cited the fact that "patents for stainless steel belonged to the 
Chemical Foundation, Inc., New York, and the Krupp Com- 
pany of Germany, jointly, and that of the United States Steel 
Corporation, Carnegie, Illinois, American Steel & Wire, Na- 
tional Tube, etc., were thereby under an obligation to work 
with the Krupp concern." He also cited the Zeiss Company, the 
Leica Company, and the Hamburg- Amerika Line as typical 
firms that had been especially ef fective in protecting German 
interests abroad. He gave New York addresses to the twelve 
men. Glancing at his watch, Dr. Scheid asked for comments 



25 



from each of the twelve around the table. Then he adjourned the 
morning session for lunch. 

At his signal, soldier stewards brought in a real Strasbourg 
lunch. On a long side table they placed plates of pate de foie 
gras, matelote, noodles, sauerkraut, knuckles of ham, sausages, 
and onion tarts, along with bottles of Coq au Riesling from 
nearby wineries. Brandy and cigars were also set out and the 
stewards left the room, closing the doors quietly as guards stood 
at attention. 

Following lunch, several, including Dr. Scheid, left for the 
Rhine and Germany, where they would spread the word among 
their peers in industry about the new industrial goals for the 
postwar years. 

A smaller conference in the afternoon was presided over by 
Dr. Bosse of the German Armaments Ministry. It was attended 
only by representatives of Hecko, Krupp, and Rochling. Dr. 
Bosse restated Bormann's belief that the war was all but lost, 
but that it would be continued by Germany until certain goals 
to insure the economic resurgence of Germany after the war 
had been achieved. He added that German industrialists must 
be prepared to finance the continuation of the Nazi Party, 
which would be forced to go underground, just as had the 
Maquis in France. 

"From now on, the government in Berlin will allocate large 
sums to industrialists so that each can establish a secure post- 
war foundation in foreign countries. Existing financial reserves 
in foreign countries must be placed at the disposal of the party 
in order that a strong German empire can be created after 
defeat. It is almost immediately required," he continued, "that 
the large factories in Germany establish small technical of fices 
or research bureaus which will be absolutely independent and 
have no connection with the factory. These bureaus will receive 
plans and drawings of new weapons, as well as documents which 
they will need to continue their research. These special of flees 
are to be established in large cities where security is better, 
although some might be formed in small villages near sources 
of hydroelectric power, where these party members can pretend 
to be studying the development of water resources for benefit 
of any Allied investigators." 

Dr. Bosse stressed that knowledge of these technical bureaus 



26 



would be held only by a very few persons in each industry and 
by chiefs of the Nazi Party. Each of flee would have a liaison 
agent representing the party and its leader, Reichsleiter Bor- 
mann. "As soon as the party becomes strong enough to reestab- 
lish its control over Germany, the industrialists will be paid 
for their effort and cooperation by concessions and orders." 

At both morning and afternoon conferences, it was empha- 
sized that the existing prohibition against the export of capital 
"is now completely withdrawn and replaced by a new Nazi pol- 
icy, in which industrialists with government assistance (Bor- 
mann to be the guiding leader) will export as much of their 
capital as possible, capital meaning money, bonds, patents, sci- 
entists, and administrators." 

Bosse urged the industrialists to proceed immediately to get 
their capital outside Germany. "The freedom thus given to 
German industrialists further cements their relations with the 
party by giving them a measure of protection in future ef forts at 
home and overseas." 

From this day, German industrial firms of all rank were to 
begin placing their funds — and, wherever possible, key man- 
power — abroad, especially in neutral countries. Dr. Bosse 
advised that "two main banks can be used for the export of funds 
for firms who have made no prior arrangements: the Basler 
Handelsbank and the Schweizerische Kreditanstalt of Zurich." 
He also stated, "There are a number of agencies in Switzerland 
which for a five percent commission will buy property in 
Switzerland for German firms, using Swiss cloaks." 

Dr. Bosse closed the meeting, observing that "after the defeat 
of Germany, the Nazi Party recognizes that certain of its best 
known leaders will be condemned as war criminals. However, in 
cooperation with the industrialists, it is arranging to place its less 
conspicuous but most important members with various German 
factories as technical experts or members of its research and 
designing offices." 

The meeting adjourned late. As the participants left, Dr. 
Bosse placed a call to Martin Bormann in Berlin over SS lines. 
The conversation was cryptic, merely a report that all industri- 
alists at the one-day Strasbourg conference had agreed to the new 
policy of "flight capital" as initiated by the Reichsleiter. With 
the report completed, Bormann then placed a call, to Dr. 



27 



Georg von Schnitzler, member of the central committee of the 
I.G. Farben board of directors. 

I.G. Farben had been the largest single earner of foreign ex- 
change for Germany during the years of the Third Reich. Its 
operations in Germany included control of 380 companies with 
factories, power installations, and mines, as well as vast chemical 
establishments. It operated in 93 countries and the sun never set 
on I.G. Farben, which had a participation, both acknowledged 
and concealed, in over 500 firms outside Germany. They grew 
as the Third Reich did, and as German armies occupied each 
country in Europe they were followed by Farben technicians 
who built further factories and expanded the I.G. investment 
to RM (Reichsmarks) 7 billion. The Farben cartel agreements 
involving trade and the related use of its chemical patents also 
numbered over 2,000, including such major industrial concerns 
as Standard Oil of New Jersey (now Exxon), the Aluminum 
Company of America, E.I. du Font de Nemours, Ethyl Export 
Corporation, Imperial Chemical Industries (Great Britain), 
Dow Chemical Company, Rohm &Haas, Etablissments Kuhl- 
man (France), and the Mitsui interests of Japan. 

I.G. Farben was a formidable ally for Reichsleiter Bormann 
in his plans for the postwar economic rebirth of Germany. In a 
telephone conversation with Dr. von Schnitzler, Bormann asked 
what would the loss of factories in France and the other occu- 
pied countries mean to German industry in general and to I.G. 
in particular. Dr. von Schnitzler said he believed the technical 
dependence of these countries on I.G. would be so great that 
despite German defeat I.G., in one way or another, could regain 
its position of control of the European chemical business. 

"They will need the constant technical help of I.G. 's scien- 
tific laboratories as they do not own appropriate installations 
within themselves," he further told Bormann, adding that he 
and other industrialists such as Hermann Rochling "do not 
think much of Hitler's recent declaration of a scorched-earth 
policy for Germany. Destruction of our factories will surely 
inhibit Germany's recovery in the postwar world," he af firmed. 

Bormann pondered this exchange with von Schnitzler. It was 
then that he determined to countermand Hitler's order for the 
ruthless destruction of German industry. He was aware also that 
the Gauleiters, the regional political supervisors and area com- 



28 



manders of the party, who reported to him as party chief, shared 
the same view as expressed by Dr. von Schnitzler. 

However, Bormann waited nearly four weeks until the right 
moment came to go against Hitler's directive. It came when 
Albert Speer, minister for armaments and war production, sent 
a teletype on September 5, 1944, to headquarters for Hitler's 
attention. In this message, Speer outlined the realistic reasons 
why industrial plants should not be destroyed; Bormann lost no 
time sending this on to all the Gauleiters of Germany with his 
own imperative: "On behalf of the Fuehrer I herewith transmit 
to you a communication from Reichsminister Speer. Its provis os 
are to be observed strictly and unconditionally." 

Speer had commented, "Even Bormann had played along 
with me. He seemed to be more aware than Hitler of the fearf ul 
consequences of total devastation." Speer also noted, in this 
month of September 1944, that "Hitler's authority in the party 
was no longer what it had been." 

Such authority had long since passed quietly to Reichsleiter 
Bormann, who had succeeded in outmaneuvering all the old 
gang: Goering, Goebbels, Himmler, the various generals, and 
Speer, who was told in 1944 by Hitler always to deal directly 
with Bormann on all matters. As Speer put it, "I had lost for 
good." He was embittered and envious, and his feelings were 
to color every utterance he made about the Reichsleiter. 

Martin Bormann was now the leader in fact of Germany. 
Hitler, exhausted, drained of the charisma of the glory days of 
the thirties and the conquest years of the early forties, was going 
through the gestures of military leadership mechanically as his 
troops fell back on all fronts. Martin Bormann, forty-one at the 
fall of Berlin, and strong as a bull, was at all times at Hitler's 
side, impassive and cool. His be-all and end-all was to guide 
Hitler, and now to make the decisions that would lead to the 
eventual rebirth of his country. Hitler, his intuitions at peak 
level despite his crumbling physical and mental health in the 1st 
year of the Third Reich, realized this and approved of it. "Bury 
your treasure," he advised Bormann, "for you will need it to 
begin a Fourth Reich." That is precisely what Bormann was 
about when he set in motion the "flight capital" scheme August 
10, 1944, in Strasbourg. The treasure, the golden ring, he envi- 
sioned for the new Germany was the sophisticated distribution 



29 



of national and corporate assets to safe havens throughout the 
neutral nations of the rest of the world. 

Martin Bormann knew in his heart that the war in Europe 
was over when Normandy was lost. The day Hitler's troops were 
defeated at the Falaise Gap was the day he ordered swing indus- 
trialists of Germany to Strasbourg to hear his plans for 
Germany's future. 

Society's natural survivors, French version, who had served the 
Third Reich as an extension of German industry, would con- 
tinue to do so in the period of postwar trials, just as they had 
survived the war, occupation, and liberation. These were many 
of the French elite, the well-born, the propertied, the titled, the 
experts, industrialists, businessmen, bureaucrats, bankers. On 
the other hand, the intellectuals, the writers, the propagandists 
for the Germans, and the deputies of the Third Republic were 
among those purged with a heavy hand. The number of French- 
men who were part of the resistance during World War II was 
never large, about 2 percent of the adult population. With the 
liberation of France, old scores were settled: 124,750 persons 
were tried, 767 being executed for treason or contact with the 
enemy in time of war. Sentenced to prison terms were 38,000, 
who also endured "loss of national dignity" — disenfranchisement 
and ineligibility to hold public of fice. Even before any arrests 
and trials could take place, another 4,500 were shot out of 
hand. 

Still, economic collaboration in France with the Germans 
had been so widespread (on all levels of society) that there had 
to be a realization that an entire nation could not be brought to 
trial. Only a few years before, there had been many a sincere 
and well-meaning Frenchman — as in Belgium, England, and 
throughout Europe — who believed National Socialism to be the 
wave of the future, indeed, the only hope for curing the many 
desperate social, political, and economic ills of the time. France, 
along with other occupied countries, did contribute volunteers 
for the fight against Russia. Then there were many other 
Frenchmen, the majority, who resignedly felt there was no way 
the Germans could be pushed back across the Rhine. 

Meanwhile, individuals had to survive. After 1940 France was 
neatly tucked into the German economic scheme; occupied 
countries would be supply areas for the benefit of the Third 



30 



Reich. As an example of the cooperating industrialist, there was 
Marcel Boussac, the richest man in France at the time. This 
aging cotton textile magnate, now deceased, prospered under 
German occupation, like his peers. He had done well in World 
War I, and he did well during World War II. In the former he 
made his first millions, by supplying uniforms and airplane fab- 
ric to the French army. Between wars he expanded, acquiring 
textile factories by the dozens. When the Germans swept across 
France in 1940 he promptly turned to them as new customers, 
and began making the cloth for German army uniforms, para- 
chute materials, and linen for fire-hose lining (a big-ticket item 
as British and American bombers set fire to German cities). 

Other textile manufacturers, particularly those at Calais and 
Caudry, made the camouflage for such German defense installa- 
tions at the West Wall, and mosquito netting for Rommel's 
Afrika Korps. 

Boussac and his kind produced a trickle of fabrics for French 
clothing, but, on German orders, there was almost no limit to 
the quantity and quality of goods they turned out for the 
French fashion industry. German policy was to nurture the 
haute couture houses of Paris. It brought in foreign exchange, 
and it was good propaganda to have the world note luxury 
continuing to flourish as ever in the French capital. 

In 1943, when the needs of the civilian population were to 
be met with an annual allowance of one kilo of cloth per per- 
son, the haute couture received 80 metric tons, enough to fill 
the regular clothing rations from 80,000 French civilians. Lucien 
LeLong, under German guidance, was the director in charge 
of policy for the French fashion industry. His collection and 
those of 60 other maisons de couture participating in the sea- 
sonal fashion shows in Paris for buyers from Germany, the 
other occupied countries of Europe, and the neutral nations, 
maintained prewar Parisian fashion standards. French fashions 
continued to be sold in markets of the Western Hemisphere 
throughout the war. One device often used as part of such a 
marketing scheme was to have fashionable women "expelled" 
from France for anti-German and pro-Allied sentiments. The 
women would then make their way to Lisbon and sail for N ew 
York or Buenos Aires on a neutral steamer with their trunks 
containing the latest creations of LeLong and his group of 



31 



collaborating maisons de couture. Orders were taken, paid for, 
filled. 

This was collaboration, but few in this industry were to go 
on trial, any more than were the industrialists who owned the 
textile companies, chemical plants, and heavy industry. How- 
ever, the rayon industry was more than a collaboration between 
French and German interests. The Gillet-Carnot organization 
of the French rayon interests had close prewar relationships in 
price controls and markets to the German Kunstseide and 
Zellwolle Ring, and this laid the foundation for fuller collabo- 
ration after the collapse of France. By December 1940, most of 
the rayon-producing facilities in France were united under a new 
holding company, France-Rayonne, to which the German 
Ring group contributed 33 percent of the capital in the form of 
patent rights and technical advice. 

The capital of those French companies that became subsidi- 
aries of France-Rayonne totaled over 800 million francs. Three 
quarters of this sum was represented by National Viscose and 
Givet-Izieux, in which the Gillet and related families, such as 
Balay, Bizot, and Motte, were the largest shareholders. 

The large French chemical interests of Kuhlmann also had 
their agreements with I.G Farbenindustrie long before the war. 
Then, when France fell, this relationship ripened, expanding 
into full German majority control and stock ownership. The 
I.G. board of directors formed a new French holding company, 
capitalized at 800 million francs, and named it Francolor; it held 
the stock of Kuhlmann and other French dye and chemical 
interests. Fifty-one percent of Francolor' s stock was acquired by 
I.G. Farbenindustrie, without whose basic patents no chemical 
company in Europe could operate. 

The Germans were also diligent in acquiring stock control in 
other prime industries, and when their troops were forced from 
France in 1944, their economic imprint would remain. 

When Reichsleiter Bormann accepted the fact that the war 
was lost, he gave himself nine months to place into operation 
his flight capital program of safe haven for the liquid assets of 
Germany. Little Alsace-Lorraine was a microcosm of Nazi take- 
overs in the rest of occupied Europe as regards commerce, in- 
dustry, and banking. They had fitted the iron and steel industry 
of Lorraine into their vast International Steel Cartel and had 



32 



"Aryanized" Jewish concerns, which meant outright appropria- 
tion. I.G. Farben assumed control of the potassium mines of 
Alsace. The insurance business, which had been largely under- 
written by French and British companies, was transferred to 
German companies. The big German banks, such as Deutsche 
Bank, Commerzbank, and Dresdnerbank, purchased majority 
shares of the Alsace-Lorraine banks, the institutions that under 
occupation controlled the very life and economy of the people. 

With the disastrous conflict-to-come looming after August 10, 
1944, the realists — that is to say, Bormann, the Ruhr industri- 
alists, and the German bankers — knew it was time for new and 
secretive directions, were Germany to survive and emerge from 
defeat to once more become a world leader. 



33 



A COMPLICATED INDIVIDUAL, MARTIN BORMANN 
planned shrewdly for the future, keeping six secretaries busy. 
During the final six months of World War II he sorted his 
records, shipping them with other historical documents to 
South America: by truck to Munich, by air to Spain in special 
Luftwaffe courier planes, then on freighters chartered for the 
transport of German SS men from their gathering place at the 
terminal of two principal escape routes, the Spanish port of 
Vigo. This small city, in the northeastern province of Galicia, 
was dictator Generalissimo Franco's home region. 

One of Bormann's office ladies in Berlin described him as a 
"fiend for organization and paperwork," which was indeed his 
forte while he was rising through the ranks to become Hitler's 
right-hand man. A master of intrigue, and therefore generally 
disdained by many in the inner circle around the Fuehrer, 
Bormann always had the unquestioning confidence of the Nazi 
leader; this was his wellspring of unlimited power. 

In dismissing criticisms of Bormann, Hitler once explained: 
"I know that he is brutal. But there is a sense in everything he 
does, and I can absolutely rely on my orders being carried out 
by Bormann immediately and in spite of all obstacles. Bor- 
mann's proposals are so precisely worked out that I have only to 
say yes or no. With him I deal in ten minutes with a pile of 
documents for which with another man I should need hours. 



37 



If I say to him, remind me about such-and-such a matter in half 
a year's time, I can be sure he will really do so." 

Albert Speer, an architect who began his professional life 
designing buildings for the Nazis, rose to become the highly 
competent minister of armaments and war production. In his 
book, Inside the Third Reich, he described how Bormann solidi- 
fied his position as number one man to Hitler: 

He alone, with Hitler's compliance, drew up the appointments calen- 
dar, which meant that he decided which civilian members of the gov- 
ernment or Party could see, or more important, could not see, the 
Fuehrer. Hardly any of the ministers, Reichsleiters, or Gauleiters 
could penetrate to Hitler. All had to ask Bormann or present their 
programs to him. Bormann was very efficient. Usually the official in 
question received an answer in writing within a few days, whereas in 
the past he would have had to wait for months. I was one of the 
exceptions to this rule. Since my sphere was military in nature, I had 
access to Hitler whenever I wished. Hitler's military adjutants were 
the ones who set up my appointments. 

After my conference with Hitler, it sometimes happened that the 
adjutant would announce Bormann, who would then come into the 
room carrying his files. In a few sentences, he would report on the 
memoranda sent to him. He spoke monotonously and with seeming 
objectivity and would then advance his own solution. Usually Hitler 
merely nodded and spoke his terse, "Agreed." On the basis of this one 
word, or even a comment by Hitler, which was hardly meant as a direc- 
tive, Bormann would often draft lengthy instructions. In this way ten or 
more important decisions were sometimes made within half an hour. 
De facto, Bormann was conducting the internal affairs of the Reich. 

H. Trevor Roper has observed: "Bormann was a man of enor- 
mous power, for he controlled the whole party machine through 
which Germany was governed. . . . The more adventurous figures 
around Hitler despised Bormann as a plodding bureaucrat, an 
uncultured lout. The more colorful, more intellectual figures 
around Lenin despised Stalin on precisely the same grounds. But 
we know who won." 

Bormann was a classic embodiment of the dictator in the 
antechamber, a type now usual in governments around the 
world and in the multinational corporations, which usually tell 
governments what to do. Those who scorned him were typical 



38 



stalwarts of every revolutionary movement, the old guard of faith- 
ful fighters, the populists, who assume their early success will 
endure unchangingly. Great individuals build up great corpora- 
tions; but it is the second generation of professional managers to 
whom shareholders look to carry on the tradition of expansion 
and profits. Martin Bormann was a second-generation profes- 
sional who consolidated for Hitler the power he had accumulat- 
ed. He was at ease in the bureaucratic apparatus and mastered the 
mechanisms of government with the greatest skill. Behind his 
back he was referred to as "Hitler's evil spirit." One of the inner 
circle was said to burst out, "I am claiming for myself the privi- 
lege of personally killing the Fuehrer's Mephistopheles." 

There he was, Martin Bormann, at Hitler's side from daybreak 
until midnight, his stocky figure in Nazi uniform, his briefcase 
always at hand, listening, weighing situations, diligent, calculat- 
ing, ever supportive of the Fuehrer, ever indispensable. Walter 
Schellenberg, chief of the SS Foreign Intelligence Service, 
described Bormann as "a thickset man, with square shoulders and 
a bull neck. His eyes were like those of a boxer advancing on his 
opponent. His appearance was conventional and unassuming. 
Those who were rivals and even enemies always underestimated 
his abilities." 

While the more conspicuous leaders of the Third Reich were 
strutting before the people of Germany and parading for the news 
media of the world, Bormann was unobtrusively gaining control 
of those points of power that count. He earned and kept to the 
last the total trust of Hitler. 

Martin Bormann was born on June 17, 1900, in Halberstadt. 
He had a younger brother, Albert, born on September, 2; 1902. 
Their father had served in the German army in World War I as 
a senior sergeant, and afterward became a civil servant in the 
German postal system. Both sons were baptized and raised as 
evangelical Lutherans. Martin attended the Science High School 
of Halberstadt, where his capabilities in mathematics were 
noted. Upon reaching the age of eighteen, he was called into the 
army during the tag end days of World War I and found him- 
self a cannoneer in the 55th Field Artillery Regiment. 
Discharged the following year, he attended agricultural college. 
Then appeared evidence of his interest in German nationalism; 



39 



he joined a Freikorps, a paramilitary group of right-wing acti- 
vists. These had been formed in a loosely knit manner through- 
out Germany to counter communists and foreign interests. 

The Freikorps that Bormann joined was directed by a Lieu- 
tenant Gerhard Rossbach. One of the lasting friendships Bor- 
mann made through this association was with Hermann von 
Treuenfels, scion of an important landowning family of Meck- 
lenburg. In 1920 Bormann became goods inspector on the von 
Treuenfels estate near Parchin. It was a time of raging inflation. 
Before 1912 a billion marks would have been a Krupp-type 
fortune, but in 1921-22 it had the purchasing power of one 
cigarette or a small candy bar. The Freikorps dedicated itself to 
halting this destructive condition and the inroads of com- 
munists in government. By day Bormann worked on the estate; 
by night he carried out sabotage operations against the French 
occupation troops. The following year, 1923, during a skirmish 
in Mecklenburg, Bormann, as leader of the district unit of the 
Rossbach organization, was arrested for complicity in the mur- 
der of a communist said to have infiltrated the Freikorps. He 
was tried for what was termed a "political assassination of a 
traitor," found guilty, and sent to Leipzig prison for one year. 
Released in 1925, he returned to Mecklenburg, and on July 4, 
1926, joined the National Socialist German Workers Party, 
earlier formed by Adolf Hitler. Bormann's party number, an 
early one, was 60,508. 

Martin Bormann's organizational abilities and financial acu- 
men were soon recognized. In 1928 he was made district leader, 
business manager, and spokesman for the NSDAP's district of 
Thuringia in Jena. Then, from 1928 until 1950 he was assigned 
to the headquarters staff of the Supreme Command of the SA, 
the "oberste SA," which controlled the activities of the Storm 
Troopers, or Brown Shirts. On September 2, 1929, he married 
Gerda Buch, the daughter of Major Walter Buch, chairman of 
the party's court for the determination of NSDAP legal matters 
and internal discipline. 

These were heady days for Bormann. The communists, who 
threatened to seize control of Germany and indeed nearly did 
so, were being battled in the streets of German cities by the SA, 
and Bormann was part of the action. Most thoughtful, solid 
Germans had become frightened and were disenchanted with 



40 



the vacillating government of the Weimar Republic, virtually 
powerless to stanch inflation and to stabilize the mark. Abert 
Speer, in his book Inside the Third Reich, describes how he 
was drawn to Hitler's National Socialist German Workers 
Party: 

It must have been during these months that my mother saw an SA 
parade in the streets of Heidelberg. The sight of discipline in a time of 
chaos, the impression of energy in an atmosphere of universal hope- 
lessness, seems to have won her over also. She joined the Party. Both 
of us seem to have felt this decision to be a breach with a liberal fam- 
ily tradition. In any case, we concealed it from one another and from 
my father. 

The crucial fact appeared to me to be that I personally had to 
choose between a future communist Germany or a future National 
Socialist Germany since the political center between these two 
antipodes had melted away. 

Moreover, in 1931, 1 had some reason to feel that Hitler was mov- 
ing in a moderate direction. The party at that time was confining 
itself to denouncing what it called the excessive influence of the Jews 
upon various spheres of cultural and economic life. It was demanding 
that Jewish participation in these various areas be reduced to a level 
consonant with their percentage of the population. 

Funding was the overriding problem of the new political 
party. Bormann, working in the high echelons of the NSDAP, 
knew it would never become a dominant part of German 
political life until it had the support of German industry. Other 
parties were being funded with millions of marks annually, par- 
ticularly "Deutsche Volkpartei," "Deutschnationalen," and 
"Dermokraten." The Social Democrats were largely supported 
by the banks and breweries. So it was that Bormann considered 
it a major breakthrough when, in 1931, Dr. Emil Kirdorf, a 
leading Ruhr coal producer, and Fritz Thyssen, a steel magnate, 
introduced Hitler into the influential Rheinisch-Westfalian 
industrial circles. The NSDAP benefited with nearly a million 
marks, enough to whet the appetite but not quite enough for 
political success. 

Turning points were at hand for Hitler and his group. In 
January Count Hans Rodo von Alvensleben, a Junker nobleman 
and landowner in Prussia, an important Ruhr industrialist a nd 



41 



board member of Deutsche Bank, attended a meeting at Hitler's 
house in company with such as Baron Kurt von Schroeder, 
partner of the Cologne banking firm of J.H. Stein Bankhaus. 
At this gathering, Count von Alvensleben spoke glowingly of 
Hitler to the other industrialists present, as he did to Paul von 
Hindenburg, the Reich president, and Franz von Papen, who 
were both there. The presence of these two revered figures was a 
tremendous coup for Hitler. When the evening ended, there were 
commitments all around to aid Hitler in his ambitions. 

In the following month, February, twenty industrialists met 
in the home of the president of the Reichstag, Hermann Goer- 
ing. Among those present were such luminaries as Dr. Georg 
von Schnitzler of I.G. Farben, representing the board of direc- 
tors, and I.G.'s president, Hermann Schmitz. Hitler spoke about 
a new alliance he had made for his party to join forces with the 
Deutsche-Nationale Volkspartei, led by Franz von Papen, who 
was later to become vice chancellor of the Third Reich. Hitler 
stressed how important it was for the joined parties to gain a 
majority in the forthcoming Reichstag elections. Finishing 
speaking, he withdrew, and grandfather Krupp von Bohlen and 
others voted to contribute 3 million Reichsmarks to the two 
party alliance. 

With this encouragement, funds now poured in from indus- 
try in general. The elections in March were a breeze. Hitler went 
over the top, with the backing of industrialists, bankers, the 
middle class, the small tradesmen and craftsmen, and the World 
War I veterans, especially the former officers. All were con- 
vinced that Hitler must be voted into power if communism 
and civil war were to be avoided. 

As chancellor, Hitler moved Germany forward. From a nation 
with the most jobless it became the nation with the fewest. 
This was achieved by permitting industry to have its head in free 
enterprise and open competition. H e harnessed the people, not 
industry. He told the workers of Germany that full employ- 
ment and prosperity depended on greater production and work 
at all levels. German mass production became the envy of 
Europe, not only in its volume but also in its quality. Trade 
generated with Western Europe and the Balkan countries dou- 
bled and tripled. Through this and a refreshed diplomacy, much 
of Europe was being drawn into the German orbit and away 



42 



from France and Great Britain, a matter of increasing concern 
in Paris and London. 

But as a political leader as well as head of government, Hitler 
was aware that his domestic machinery, the basis of his power, 
must run smoothly everywhere and at all times. On April 25, 
1930, he had appointed Martin Bormann director of the NSDAP 
fund. Then, in July 1933, Hitler moved Bormann into a signifi- 
cant power control position — chief of staff to his deputy Rudolf 
Hess, a dedicated Nazi, but one who lacked the drive and orga- 
nizational abilities necessary for continued control of an always 
expanding political apparatus. Bormann soon had things run- 
ning smoothly — his way. Citing unity and efficiency, he reduced 
the influence of the old guard by rearranging areas of jurisdic- 
tion. He turned the N SDAP treasurer, Franz Schwarz, into a 
mere bookkeeper, and assumed the powers of the office for him- 
self. Bormann had a natural money mind. He was precise i n 
fiscal matters, exact in administrative procedures, cold, delibe ir- 
ate, Machiavellian, and would have made a fine banker had he 
not gotten into politics. In a manner of speaking, as the years 
went by, he came to be a banker, eventually controlling all the 
banks of Germany, and through them the banks of all occupied 
Europe. 

In this era of the early thirties and the new prosperity of 
German industry and commerce, it followed naturally as day 
into night that Martin Bormann would devise a conduit to 
sluice funds on a regular basis to the NSDAP and Hitler. The 
Adolf Hitler Endowment Fund of German Industry was set up. 
All German industry was to subscribe to this; 60 million marks 
were collected annually to strengthen the party. Businesses didn't 
mind, for they were getting major government contracts as well 
as increasing commercial trade from abroad. Such a fund also 
did away with some of the incessant requests for money by 
offshoots of the party organization. Himmler, for example, had 
been tapping leading bankers and business leaders for contribu- 
tions to his SS welfare fund, from which he did not personally 
benefit, oddly enough. The companies contributing comprised a 
list of important banks and industries: Deutsche Bank, Dresd- 
ner Bank, Commerzbank, the Reichstag Bank, the J.H. Stein 
Bankhaus, Norddeutscher Lloyd and Hamburg- Amerika shipping 
companies, the Dr. August Oetker Food Production Company, 



43 



and such giant firms as I.G. Farben, Mitteldeutsche Stahlwerke, 
Siemens-Schuckert-Werke A.G., Portland Cement Rheinmetall- 
Borsig, and the Reichswerke Hermann Goering. The money 
designated to Himmler's fund was deposited into General Ac- 
count S in the J.H. Stein Bankhaus of Cologne. Baron Kurt 
Freiherr von Schroeder was a board member and a partner in 
this bank, and Karl Wolff, Himmler's senior aide, was author- 
ized to draw checks for SS welfare purposes on this account. 

But the Himmler fund had shrunk below 1 million marks a 
year when Reichsleiter Bormann established his Adolf Hitler 
Endowment Fund of German Industry. Up he came with another 
inspiration: the Fuehrer's Winterhilfe, a fund to which all Ger- 
mans, within the Third Reich and abroad, could contribute for 
the welfare of all troops and civilians impoverished by war. As 
a further source, industrialists and their wives were invited to the 
Reichschancellery in Berlin, where in the ballroom a concert was 
performed by noted German musicians. Walther Funk, minister 
of economics, commented: "It was there where the 'kick-in- 
some-dough' arias were sung. Every guest was compelled to sub- 
scribe to a contribution. Individual contributions ran as high 
as 100,000 marks. This 'winterfund' alone accumulated almost 
3 billion marks, which drew handsome interest in the Reichs- 
bank." 

Bormann also collected royalty payments, on behalf of the 
Fuehrer, for all postage stamps sold that bore Hitler's picture. 

With such monies under his control, Bormann now held 
power-of-the-purse over all the other Nazi leaders, including 
even the Gauleiters who ran the party machinery across Ger- 
many. All looked to Bormann for their annual funding. He set 
the housekeeping budgets for Hitler himself and his girlfriend 
Eva Braun, as well as for Goering, Goebbels, and Himmler. Eva 
Braun received her monthly checks in Munich, where she 
worked as a secretary for Heinrich Hoffmann, Hitler's official 
photographer; Bormann also collected fees for the worldwide 
sales of Hoffmann's pictures of the Fuehrer. 

It riled the top Nazis to have to ask Martin Bormann for 
money. It was like going to a banker, with reasons laid out for 
intended use of the funds, papers to be signed if the sum ex- 
ceeded the individual's budget allowance, etc., etc. Even Hein- 



44 



rich Himmler, Reichsfuehrer of the SS and chief of the German 
police, had to petition Bormann for a personal loan from the 
party chancellery fund; he had a wife and was keeping a mis- 
tress, and was financially in over his head. Bormann granted him 
the loan from the fund, and later used the information against 
him with Hitler, who was prudish in such matters. Hitler, of 
course, kept his own mistress, but insisted that married Nazi 
leaders should maintain high moral standards. 

Members of the Nazi inner circle referred to Martin Bormann 
with derision, calling him behind his back "the bookkeeper," or 
"the banker." But he knew what he was doing, and always 
landed on his feet. When he married, it was a wedding wit- 
nessed by the top-flight leaders of National Socialism. The wed- 
ding portrait shows the new Herr and Frau Bormann seated, and 
standing behind them six who attended, including Adolf Hitler 
and Rudolf Hess. Mrs. Bormann's father, Walter Buch, w ho 
was the high judge of National Socialism's legal tribunal, is also 
in the picture. As time went by he, too, developed a hearty dis- 
like for Bormann; when he died in 1947, almost in his last 
breath, he declared to his family, "That damn Martin made it 
safely out of Germany." 

Another photograph demonstrating Bormann's ascendancy is 
the group picture taken at Hitler's birthday party, on April 20, 
1938, at Berchtesgaden. Next to the Fuehrer and Eva Braun are 
Reichsleiter Bormann and Mrs. Bormann; he in white tie and 
tails reminds one of a young Rod Steiger. Albert Speer appears 
in the second row, obviously positioned there by Bormann, 
whom he referred to later that evening as "the man with the 
hedge clippers," because Bormann devoted himself to prevent- 
ing anyone else from rising above a certain level. Speer- was to 
complain later, "Things became so difficult for me that I often 
wanted to give up and resign my post." Noticeably not in this 
picture was Rudolf Hess, deputy to the Fuehrer and deputy of 
the party, an indication of his declining influence. Even in 1938 
Bormann was the man to watch. 

By this time, Martin Bormann had taken into his own hands 
all of Hitler's financial affairs, and the Fuehrer had no further 
personal concerns in this area. Bormann had also brought up 
tracts of land at Obersalzberg, built roads, barracks, concrete air 



45 



raid shelters, and an official Bavarian residence for Hitler at 
Berchtesgaden. On nearby hilltops he constructed modest 
chateaux for Goering, Goebbels, and himself. By building resi- 
dences for these two he had kept them from being overnight 
guests of the Fuehrer. He also constructed the Eagle's Nest, a 
conference area atop a granite mountain, accessible only by 
elevator, and with a breathtaking view of Bavaria. Reichsmar- 
shal Goering, of course, had his own tremendous holding, 
Karinhall, in eastern Germany, and Goebbels, minister of pro- 
paganda, maintained a home and his large family in the Berlin 
suburb near the Wansee. Bormann went on, and purchased the 
house in Branau, Austria, where Hitler was born, and the house 
of Hitler's parents in Leonding, for the Fuehrer. Deeds for all 
this property in Obersalzberg were entered in the land register 
in Martin Bormann's name. 

Bormann's growing scope of influence was out of the reach of 
other leading Nazis. He avoided publicity carefully, like many a 
financial mover and shaker of our day. In Bormann's world here 
were two kinds of people: those he could win over and s ubordi- 
nate to his purposes and those he had to fear. Basically h e dis- 
trusted everyone, and collected information constantly f or his 
personal index-card files. Even Reinhard Heydrich, a chief plot- 
ter of the SS, was awed by Reichsleiter Bormann's ingenuity. 
"There is a real master of intrigue and deceit," he remarked at a 
dinner party in Berlin. 

Joseph C. Fest, the German author, has described Bor- 
mann as 

Germany's secret ruler. . . . Apart from his indirect influence on 
Hitler's person, he came increasingly to dominate the whole Party 
apparatus. He deprived Rosenberg of part of his ideological authority 
and Ley of his jurisdiction over political personnel, and Reich 
Minister Lammers, head of the Reich Chancellery, found himself 
relieved of important responsibilities. Bormann dismissed and ap- 
pointed Party officials (Gauleiters were subordinate to him per- 
sonally), made massive use of his rights to a voice in appointments 
and promotions in all state and even military departments, gave or 
withdrew his favor, praised, bullied, eliminated, but stayed in the 
background, and at all times kept up his sleeve one more suspicion, 
one more piece of flattery, than his opponent. His nebulous position 
has been fairly compared to Stalin's power during Lenin's last days. 



46 



Bormann's closeness to the military leadership is shown in 
another photograph, taken on January 27, 1938. It was just after 
Hider had shaken up the War Ministry and General Staff, and 
had assumed personal control of the High Command of the 
armed forces, the O.K.W. Standing between Hitler and Bor- 
mann is Field Marshal Wilhelm Keitel, chief of staff of the 
armed forces. Behind, in three neat rows, are those who survived 
the political struggles. Hitler had said he was frustrated by the 
negative attitude of his generals; he retired sixteen of them and 
posted forty-four others to field positions. Traditionally, strong 
national leaders have objected to the undue caution of generals. 
President Lincoln fired his share before he got Ulysses S. Grant; 
it was the procedure followed by Winston Churchill when he 
took power the night of May 10, 1940. After assuming the 
duties of both chief of state and minister of defense, he shook 
up his military command in no uncertain manner. 

May 10, 1941, was a date to remember in Martin Bormann's 
life. That night Rudolf Hess, deputy Fuehrer, had removed 
himself from all competition for Hitler's favor by flying to Scot- 
land and parachuting to the Duke of Hamilton's estate, as an 
unofficial emissary to Hamilton, to arrange peace with Britain 
so that his Fuehrer would have freedom of action to invade 
Russia. It was a mission undertaken presumably without Hitler's 
knowledge, and it was an embarrassment to the German leader. 
Commenting on the astonishing development at the time, Prime 
Minister Churchill had said, "It was as if my trusted colleague, 
Anthony Eden, the foreign secretary, who was only a little 
younger than Hess, had parachuted from a stolen Spitfire into 
the grounds of Berchtesgaden." 

Hitler was puzzled and enraged over Hess's deed; Martin 
Bormann was not — at least he sensed the motivation behind it. 
Hess had found himself in political eclipse, superseded by Bor- 
mann, now merely a party functionary to be used for speeches 
and other public appearances. Even when it came to jobs, the 
party rank and file went no more to Hess, but to Bormann, who 
was "the" man to see for patronage. Luncheon or tea with 
Hitler was no longer an intimate occasion for Hess; the guest 
lists had been expanded to include generals and many more. 
Bormann controlled this, too, but the incident that put Rudolf 
Hess in the social deep freeze occurred the day he arrived at 



47 



Berchtesgaden accompanied by his own cook. He didn't care 
for the food Hitler served and brought his own chef to prepare 
his lunch. It was not until the meal was half over that Hitler 
realized Hess was eating food different from the others. He 
shouted at Hess that if he did not like the food served at 
Berchtesgaden he could eat elsewhere. Hess left and Hitler 
cooled off, but their relationship was never the same again. 
Hess, however, continued to idolize the Fuehrer. He reasoned 
that if he could arrange peace between Britain and Germany, 
where so many others had failed, it would provide him with a 
special niche in German history and in Hitler's affection. 

Hess's flight to Scotland was a remarkable feat. He had 
practiced his night flying skills over Munich and Augsburg. On 
May 10 he climbed into his personal Messerschmitt-110 fighte r, 
took off, and soared toward the British Isles. He had memorized 
the correct identification signals which would see him through 
the German fighter command defensive network. But once over 
the North Sea he was on his own. He headed for west Scotland 
and bailed out, descending almost on target. Wearing a Luft- 
waffe uniform, he told his farmer captors that his name was 
Lieutenant Horn. He asked to be taken to the Duke of Hamil- 
ton, commanding a fighter sector in the east of Scotland, who 
drove rapidly home. The duke interviewed Hess alone at first, 
then had his secretary telephone Winston Churchill, who was 
spending the weekend outside London at Ditchley. Churchill 
knew the duke, but could think of no reason why he should 
receive a call from him. He was watching a Marx Brothers film, 
the hour was late, and his confidant, Brendan Bracken, took the 
call. Bracken rushed back into the room with the news that 
Rudolf Hess was in Scotland, hoping for a peace meeting with 
King George VI, to be arranged through the duke. 

If Hess's arrival was a surprise, his desire for an audience with 
the King of England was pure Marx Brothers. He had met the 
Duke of Hamilton in Germany during the peacetime years, and 
knew him to be Lord Steward, a personage, he reasoned, who 
would probably be dining every night with the King and have 
his private ear. Here was his channel of direct access to the top, 
and he looked to the duke to provide it. But, of course, the duke 
telephoned Churchill at Ditchley outside of London. The prime 
minister wandered outside the room where "the merry film 



48 



clacked on," to learn the extent of damage being done by Ger- 
man bombers on this night. It was bad. He reentered the room 
where his hosts were sitting, and had Brendan Bracken ask that 
the duke travel to London the following day to tell him all 
about it. Hess was placed in the local jail the first of many 
stops which were to take him to the Tower of London, and 
ultimately to life-long imprisonment in Berlin's Spandau prison. 
Churchill later termed Hess's mission a "completely devoted 
and frantic deed of lunatic benevolence. He came to us of his 
own free will, and, though without authority, had something of 
the quality of an envoy. He was a medical and not a criminal 
case, and should be so regarded." 

On the night Rudolf Hess landed in Scotland, London was 
suffering the most deadly firebombing of the war. I was at the 
time an American war correspondent, based in London follow- 
ing the British Expeditionary Force's retreat from Dunkirk. 
Each night, from September 7 to November 3, German aircraft 
dropped bombs; in the twelve-month period from June 1940 to 
June 1941, civilian casualties in the city were 43,381 killed and 
50,856 grievously injured. Sleepless nights were followed by 
dreadful mornings, with familiar streets transformed into jagged 
ruins. Everywhere was the smell of pulverized brick and mortar, 
as rescue squads dug for any who might yet be alive in the 
rubble. For me, daily broadcasts had to be made and regular 
copy had to be filed. 

On this night, the Luftwaffe waited until nearly midnight to 
firebomb, the hour of low tide in the Thames, when fire hoses 
would suck nothing but mud. The first dreaded planes roared 
over the city about ten in the evening, carrying the high ex- 
plosives that would rip up even more streets and destroy water 
mains; then came the aircraft to firebomb and set afire what 
they could. That night 3,000 Londoners died in their air raid 
shelters. The City of London was afire. The House of Com- 
mons was hit, and the docks along the Thames and three rail- 
way stations blazed until dawn. 

The evening started languidly. I was at Number 10 Downing 
Street, a guest of the Churchill family. Mrs. Churchill, the 
three girls, Diana, Sarah, and Mary, and I feasted on a special 
treat, caviar sent to the prime minister from Josef Stalin. The 
pleasantly furnished drawing room looked out on a garden, 



49 



where recently there had dropped a German one-ton land mine, 
expedited by parachute so as to ensure maximum surface dam- 
age. Almost whimsically, the parachute had caught in a tree. 
The mine swung in the breeze until removed by the bomb dis- 
posal squad. On an earlier evening, in the winter, during dinner, 
Mr. Churchill had suddenly jumped up and shepherded every- 
one outside, across the street, to the bomb shelter — a premoni- 
tion. Within minutes, a 500-pounder landed in the back garden, 
destroying the dining room. Had Winston Churchill been killed 
that night, and he certainly could have been, Hitler might well 
have won his struggle with Britain-with just one bomb. Chur- 
chill was indeed Mr. England; it was his foresight and deter- 
mination that was holding the nation together until the United 
States could gear up and make up its mind to come to Britain's 
assistance. 

On this evening, as I visited with the family, the general tenor 
of the conversation was "When will the Yanks come?" It was not 
to be until after December 7, when the Japanese made their 
attack on Pearl Harbor. Still, the prime minister had talked on 
the telephone with President Roosevelt earlier, and the 
Churchill ladies reflected the optimism that their father exuded. 
I remember one of them remarking, "With the Yanks to back 
us up, we will make it all right." 

The drawing and dining rooms had been restored by that 
night of May 10, and back in its place on the mantelpiece was 
the miniature porcelain fish, touched for good luck by everyone 
entering the room. After a while the first wave of German planes 
approaching London was audible; then the terrifying crescendo 
of high explosives, followed by geysers of water shooting up 
from wrecked pipes in the streets, then a long silence. Mary and 
Sarah Churchill and I decided to leave Downing Street for the 
City of London. Both of the young ladies were in military uni- 
form. We went to the Savoy Hotel, and while we were there 
firebombs came down. We went outside and walked up Fleet 
Street to within sight of St. Paul's Cathedral, where we were 
stopped by police barricades. I made my own way, taking pic- 
tures, and interviewing some of those fighting the biggest fire to 
hit London since 1666. 

Walking right into St. Paul's, looking for the dean, I found 
him below ground in the crypt, reading Greek poetry by lamp- 



50 



light, alongside the tomb of Admiral Lord Nelson. This elder- 
ly clergyman explained to me that he had descended there at the 
insistence of his staff. "It was different in World War I," he 
sighed. "I was more agile then, and they had me kicking fire- 
bombs from the roof of St. Paul's. They were being dropped 
from Zeppelins, don't you know." 

When reports of Hess's adventure reached Berlin, there was 
not much that Hitler and Bormann could do about it. Goebbels 
issued a statement that the deputy Fuehrer had been ill at the 
time. Then, days later, from headquarters came the announce- 
ment: 

The former post of Deputy to the Fuehrer will henceforth bear the 
title of Party Chancellery. It is directly subordinate to me. It will 
be directed as heretofore by Party Comrade Martin Bormann. 

(signed) Adolf Hitler 

The wording was brief and low key, but it marked a giant leap 
forward for Martin Bormann. Henceforth, the entire party 
ministry would be under him. Every Nazi within Germany, in 
occupied Europe, and overseas was answerable directly to him. 
Within the year Hitler added to Bormann's titles those of 
Secretary to the Fuehrer and Lieutenant General of the SS. 
Bormann's power base was complete. 

The Auslands-Organisation (A-O) of the NSDAP was a vast 
network of German nationals living in other countries. It was 
founded on May 1, 1931, in Hamburg, and according to its char- 
ter was to be a means of keeping Germans abroad abreast of the 
philosophy and political programs of Hitler's National Socialist 
Party. As war drew near, it became an intelligence network for 
the Third Reich. Its nominal leader in the late thirties and 
throughout the war was Ernst Wilhelm Bohle, state secretary of 
the Foreign Office. In reply to a question put to him concern- 
ing the identity of his immediate superior, Bohle replied, 
"Rudolf Hess, until 1941 when he went to England." And, an- 
swering the logical follow-up question as to who had succeeded 
Hess, "Martin Bormann. Martin Bormann automatically suc- 
ceeded Hess." 

Bohle denied that the A-O was ever used for intelligence 



51 



gathering, but all evidence was to the contrary. The speed with 
which information was obtained and sent back to the Foreign 
Office in Berlin exceeded even that of Himmler's overseas SS 
operation. In Holland, as one example, the chief A-O represen- 
tative shared offices in The Hague with a German military intel- 
ligence unit, which consisted of a mere dozen professionals who 
knew their trade. When specific information about any town or 
hamlet in Holland was required, they asked a man named 
Butting, the A-O leader of the German Citizens' Association in 
Holland, who got it for them quickly. This association filled two 
functions: espionage, along with its primary function of being a 
fifth-column agency. 

The Auslands-Organisation published the Year Book of the 
Foreign Organization. In 1942 it wrote about "the enlargement 
and extension of the German Legation in Oslo and of the con- 
sulates at Bergen, Trondheim, Stavanger, Kristiansand, Ham- 
gesund, Narvik and Kirkenes." This also meant "enlargement 
of the Reich agencies of the NSDAP in Norway having to in- 
crease its field of activity too." This article also stated: "The 
success of their work, which was done with all secrecy, was 
revealed when, on 9 April 1940, German troops landed in 
Norway and forestalled the planned flank attacks of the Allies." 

Not all Norwegians were supporters of the resistance. Accord- 
ing to John Lukacs, the distinguished historian: "The number 
of people in the Norwegian resistance who died in the Second 
World War was less than the number of Norwegian pro-Nazis 
who died as members of their Free Corps on the Russian 
Front." 

It was much the same story in all countries that fell before 
the troops of the Third Reich. The Auslands-Organisation was 
a so-called fifth column in advance of German armies, and 
served as an auxiliary force when those armies arrived. As the 
leader of the A-O in Greece put it, "I organized the employ- 
ment of all party members to do auxiliary service for the armed 
forces." 

Nations such as Spain that remained officially neutral during 
the war had A-O representatives operating on a large scale with- 
in their borders. Linked closely with German consulates and 
embassies, they communicated directly with Berlin by wireless. 
One telegram, dated 23 October 1939, from Dr. von Stohrer, 



52 



German ambassador in Madrid, to the Foreign Office in Berlin, 
asked for permission to rent "a suitable isolated house for the 
possible installation of a second secret radio transmitter." Added 
on was, "Please submit to Gauleiter Bohle." All information 
gathered abroad by the Auslands-Organisation went to the SS, 
the Gestapo, the Abwehr, and the Foreign Office, for which it 
served as branches of the Foreign Intelligence Department in 
both hemispheres, including North and South America. 

In the United States the German- American Bund received 
financial and other support from the Auslands-Organisation. 
The bund received instructions from the NSDAP on how to 
build their political organizations, how and where to hold mass 
meetings, and how to handle their propaganda. In 1938 the 
order was issued by Hitler prohibiting members of the German 
embassies and consulates from having further relations with the 
bund. Hitler felt that overt activities by this German-American 
organization would be detrimental to the future interests of the 
Third Reich in the United States. Regardless, embassies and 
consulates around the United States continued to feed strategic 
data back to Berlin in a covert manner. Von Strempel, first s ec- 
retary of the German Embassy in the United States from 1938 
until Pearl Harbor, served as the clearing agent for special data 
from other confidential agents in various cities around the coun- 
try. There were also Dr. Draeger, consul in New York, a liaison 
with the A-O; Wiedemann, consul general in San Francisco; Dr. 
Gissling, consul in Los Angeles; von Spiegel, c onsul in New 
Orleans. Their reports went to Berlin and to the deputy Fuehrer, 
with distribution copies to all intelligence services of the 
German government. 

All business organizations abroad had their Auslands-Orga- 
nisation men. Outside of Germany, the employees of the three 
big banks, Deutsche, Dresdner, and Commerzbank, all had to 
be party members and were supervised by the Auslands- 
Organisation. Rudolf Tefs was an employee of the Dresdner 
Bank in Alexandria, Egypt, from 1934 to 1939. He returned to 
Frankfurt at the start of the war, and became a paymaster in the 
German army in 1940. Saying that he had been an NSDAP 
member since 1938, he added, "All bank employees in Alex- 
andria and Cairo were members of the party. . . . Personally and 
socially and politically, we were under the A-O." He com- 



53 



merited that the relationship between the leading manager of 
the bank and the German Embassy and consulates was very 
close: "The two leading men of the A-O, Lehman and Sieber, 
were also leading individuals in the Dresdner Bank." Hans 
Pilder, official of the Dresdner Bank in Turkey during the same 
years, commented, "The A-O usually opposed non-Nazi offi- 
cials of the Dresdner Bank in foreign countries." 

Reichsleiter Martin Bormann inherited this vast intelligence 
and fifth-column system upon assuming leadership of the party. 
He tightened it up and instilled it with a new purpose; it be- 
came an instrument used to implement his flight capital pro- 
gram in the last few months of the war. However, in comparison 
with another organization within the I.G. Farben structure, the 
Auslands-Organisation was second best. This, too, reported to 
Martin Bormann. 

I.G. Farben's N.W.7 office in Berlin compiled military and 
economic data on all countries for the Wehrmacht. This depart- 
ment was staffed with men of recognized ability in all branches 
of business and science. It was under the direction of Dr. Max 
Ilgner, nephew of Hermann Schmitz, I.G.'s president, who 
was known throughout the industrial world as "the master of 
financial camouflage." Farben had offices and representatives in 
93 countries, and no social gathering of businessmen was too 
small to be covered by an N.W.7 representative, whose reports 
on market conditions, factory installations, raw-material sup- 
plies, and research were transmitted immediately to Berlin and 
Dr. Ilgner. 

In the United States, N.W.7 operated through the firm of 
Chemnyco, Inc., an American-formed subsidiary. Chemnyco 
sent tremendous amounts of information ranging from photo- 
graphs and blueprints to detailed descriptions of entire industrial 
complexes and secret processes. From the United States the 
new method for production of isooctane, used for motor fuels, 
was obtained. A leading I.G. scientist has stated that this im- 
portant process had originated "entirely with the Americans 
and had become known to us in detail in its separate stages." 
The process for producing tetraethyl lead, essential for the 
manufacture of aviation gasoline, was obtained by Farben in 
the same way. An I.G. official, commenting on the importance 
of this acquisition, stated: "Without lead-tetraethyl the present 



54 



method of warfare would be unthinkable. The fact that since the 
beginning of the war we could produce lead-tetraethyl is entire- 
ly due to the circumstances that shortly before, the Americans 
had presented us with the production plans complete with 
experimental knowledge; thus the difficult work of development 
(we need only recall the poisonous property of lead-tetraethyl, 
which caused many deaths in the United States) was spared us, 
since we could take up the manufacture of this product together 
with all the experience that the Americans had gathered over 
long years." 

To be sure, I.G.'s own research facilities produced many a 
scientific breakthrough for the Third Reich. Its experts devel- 
oped the noted Buna Process for the manufacture of synthetic 
rubber, freeing Germany from dependence on natural rubber. 
It developed the hydrogenation process for making motor fuels 
and lubricating oils from coal. Germany's shortage of bauxite, 
the raw material essential to manufacture aluminum, was sur- 
mounted by its developments in utilizing the element mag- 
nesium. This was a time of stockpiling. What N.W.7 could 
not purloin, I.G.'s board of directors asked for under cartel 
arrangements with other international firms. In one instance, 
it purchased 500 tons of lead for production of high-grade avi- 
ation gasoline, obtained by a Farben Swiss subsidiary from the 
Ethyl Export Corporation of America. As it made such pur- 
chases on the world market in the late thirties, Farben con- 
tinued to produce and stockpile everything useful to the 
German armed forces. Of 43 major products by Farben, 28 were 
primary needs ofwarmakers. I.G. made all the synthetic rubber 
in Germany, all the methanol, the serums, and the lubricating 
oils. I.G. provided 95 percent of the poisonous gases as well as 
over 90 percent of the nickel and plastics; 88 percent of the 
magnesium derivatives used by the Luftwaffe in its aircraft and 
incendiary bombs came from Farben, as did most of the nitro- 
gen and explosives for the flying bombs and the V-2s. No other 
German war industry could have functioned without Farben's 
raw materials and technical assistance. 

This huge organization functioned as a manufacturing and 
research arm of the German government, with the responsibil- 
ity of discovering all possible means of increasing the military 
power of Germany. More than RM 4.25 billion was invested in 



55 



new plants, mines, and power installations, with other millions 
going into new research facilities. Albert Speer was to become 
minister of armaments and war production in 1942, but it was 
the money largely supplied to Farben during these preparatory 
years, at Martin Bormann's suggestion to Hitler, that fueled the 
German war machine. So close had Farben become to the gov- 
ernment that I.G. always knew in advance all invasions planned 
by Hitler. It was to supply the materials necessary to each con- 
quest, and when a land had been overrun and subjugated, the 
Farben experts would handle the consolidation and organization 
of the industrial facilities as additional supply sources for the 
German armed forces. 

As German troops swept across Europe and Hitler proclaimed 
his vision of a thousand-year Third Reich, I.G. Farben also 
dreamed of world empire. This was outlined with clarity in a 
document called Neuordnung, or "New Order," that was ac- 
companied by a letter of transmittal to the Ministry of Eco- 
nomics. It declared that a new order for the chemical industry 
of the world should supplement Hitler's New Order. Therefore, 
the document stated, Farben was fitting future industrial plans 
into such a framework. It projected that the chemical industries 
of Europe, including those of Great Britain, should work for 
the Third Reich, and that the United States competition should 
be eliminated from world markets. The plan became effective 
only in Austria, Czechoslovakia, Poland, Romania — western and 
southeastern Europe — where German armies were on hand to 
enforce it. 

Still, this market was vast for the times. I.G. Farben was the 
major chemical firm on the Continent, and as each country fell 
to Germany its acquisitions of chemical and dyestuff companies 
were enormous. I.G. also increased its investments in these by 
RM 7 billion. 

The close relationship of Farben to the Third Reich leader- 
ship was underscored in other ways. I.G.'s leading officials 
assisted in formulation and execution of economic policies of 
government; its president was a member of the Reichstag; its 
leading scientist was a chief assistant to Hermann Goering 
under the Four- Year Plan; its statisticians and economists pre- 
pared intelligence for the Nazi High Command; scores of its 
technicians were at any given time on loan to the air and war 



56 



ministries. The importance placed by the Third Reich govern- 
ment on such industrial information is reflected in a letter dated 
August 3, 1940, to the German minister of economics from Dr. 
Max Ilgner, director of N.W.7, which stated: 

Extensive information which we receive continuously from Chemnyco 
is indispensable for our observations of American conditions, especial- 
ly with a view to the technical development, the possibilities for 
export, and the competition of foreign countries and companies, espe- 
cially England. Moreover, this material is, since the beginning of the 
war, an important source of information for governmental, economic 
and military offices. 

The contact men of N.W.7 throughout the world were called 
the I.G. Verbindungsmanner, the liaison officers between 
Farben back in Germany and the branches elsewhere. These 
I.G. Verbindungsmanner, as well as all other key Farben repre- 
sentatives working beyond the borders of the Third Reich, were 
members of the National Socialist German Workers Party. 
Their loyalty to Hitler and to the New Order was uncompro- 
mising, and on September 10, 1937, the commercial committee 
of the board of directors of I.G. Farben passed a resolution 
spelling out the importance placed on loyalty to the nation in 
selection of employees: 

It is hereby understood that in no case will men be sent to our for- 
eign companies who do not belong to the German Labor Front and 
who do not possess a positive attitude toward the New Order. The 
men who are to be sent should make it their special duty to repre- 
sent National Socialist Germanhood. Especially are they to be 
instructed that upon entering our companies they are to make con- 
tact with the Ortsgruppe of the respective Landesgruppen [organi- 
zations of the Nazi Party within the various countries] and regular- 
ly participate in their meetings as well as in the Labor Front. The 
sales departments should also see to it that an appropriate amount 
of National Socialistic literature is given to them. The cooperation 
with the A-O to work out a uniform plan for the purpose of detect- 
ing defects still existing in our foreign companies to the end that 
they can be eliminated. 

So now Martin Bormann had at his command not only the 
Auslands-Organisation but also the I.G. Verbindungsmanner of 



57 



Farben, which could be counted on to heed his orders when it 
was time to disperse the commercial assets of the Third Reich. 
Farben, Krupp, Bayer, and other major German firms outside of 
Europe had long been accustomed to complying with orders 
from the Fuehrer's headquarters — that is, Bormann — in Berlin. 
In Brazil, the agencies of the Bayer division furnished the 
equivalent of RM 3,639,343 to the German Embassy and to 
representatives of NSDAP traveling from Berlin to Brazil for 
espionage and propaganda purposes. In Spain, when the Ger- 
man Embassy wanted Spanish pesetas, I.G. Farben supplied 
them, being repaid by the home government in Berlin, a book- 
keeping transaction. In Mexico City, the relationship between 
Farben and the German government was emphasized by a 
telegram dated September 2, 1939, to I.G. from the Cia. General 
de Anilinas, S.A., Mexico City. It read: 

IN CASE OF WAR LEGATION ASKS FIRMS MEXICO TO LET THEM HAVE 
MONEY ON A LOAN BASIS AMOUNTS SHALL BE REFUNDED BY GERMAN 
GOVERNMENT. PLEASE AUTHORIZE MONTHLY PAYMENTS PESOS 10,000 
ON BEHALF OF ALL I.G. AGENCIES. MEXICO PRESS MUST BE INFLUENCED. 

A notation on the bottom of this telegram, once in Germany, 
read: "Board agreeable. Dr. Overhoff informed." Such payments 
abroad before and during World War II were of importance to 
the German government in the acquisition of raw materials and 
in the financing of sabotage, espionage, and propaganda. 

I.G. Latin American firms all maintained, unrecorded in 
their books, secret cash accounts in banks in the names of their 
top officials. These were used to receive and to disburse confi- 
dential payments; firms dealing with Farben wanted this b usi- 
ness but certainly did not wish it known to British and United 
States economic authorities. Georg Wilhelm Marty, a German 
auditor, traveled with some frequency between Germany and 
South America during these war years to audit the books of 
the various branches of the Deutsche Sudamerikanische Bank. 
He was "on loan" from the Dresdner Bank, and explained in a 
sworn statement to investigators at the Nuremberg Trials (I 
took this from a document on record in the National Archives 



58 



in Washington, D.C.) how this and other secret accounts were 
handled: 

The Buenos Aires branch of the Deutsche Sudamerikanische Bank 
held an account for the German Embassy in that city, and also an 
account for the Buenos Aires Ortsgruppe of the NSDAP. Similar 
accounts were also held by the Deutsche Uberseeische Bank, the 
South American affiliate of the Deutsche Bank. With respect to the 
Ortsgruppe account, most South American branches of German firms 
made contributions three or four times a year of approximately 
100,000 Argentine pesos. These payments involved transfers from the 
accounts of the various firms held with the Deutsche 
Sudamerikanische Bank to the Ortsgruppe account. The occasions 
were such events as the Winterhilfe Drive, Hitler's birthday, etc. 
Among the most important clients of the bank were I.G. Farben, 
Schering, Vereinigte Stahlwerke, Merck, Siemens, A.E.G., Weiss, 
and Freitag. Among the uses made of the Ortsgruppe account were 
the transfer of portions of the monies contained therein to Germany 
for Winterhilfe and payments to the local NSDAP staff. 

Payments into the Embassy account in the Buenos Aires branch 
were made from deposits of the Foreign Office in the Berlin office of 
the Deutsche Sudamerikanische Bank. Money to the Embassy 
account were also transferred from Germany to Argentina indirectly 
via Mexico or Switzerland. 

Between 30 and 40 percent of the German employees of the 
Deutsche Sudamerikanische Bank branch in Buenos Aires were 
members of the NSDAP. 

Martin Bormann now had a vast overseas financial and com- 
mercial network to do his bidding. It was a sturdy beginning, 
and it was to grow in strength and numbers in the next two 
years as he organized all German corporations and banks into 
his safe haven program of flight capital. 



59 



TO HISTORIANS OF THE NAZI SS, 1943's SIGNIFICANT 
events were the surrender of Stalingrad, the ending of hostilities 
in North Africa, the appointment of Heinrich Himmler by 
Hitler as minister of the interior, the capitulation of Italy, and 
the rescue of Mussolini by SS Brigadefuehrer Otto Skorzeny 
from an Italian mountaintop fortress. Historians with a broader 
focus on the European war would include: the round-the-clock 
bombing by RAF and U.S. Air Force planes of German cities 
and other key targets, the Battle for the Atlantic in climax and 
conclusion, the massacre of Polish Jews in the Warsaw ghetto 
by SS troops (to be repeated with even greater ferocity in 1944 
as Russian divisions stood idly outside the Polish capital, on 
orders from Stalin), the formation in Algiers of the French 
Committee of National Liberation, at first under generals 
Giraud and de Gaulle, later under de Gaulle alone, the Allied 
landing in Sicily, the casting down from power of Mussolini by 
vote of the Fascist Grand Council, the Allied crossing of the 
Mediterranean to mainland Italy, the new Italian government 
under Marshal Badoglio that shifted its support from Germany 
to the Allies, and the meeting of Churchill, Stalin, and Roose- 
velt at Teheran to coordinate plans for a final attack on Ger- 
many. 

But to Bormann the most telling event of 1943 was the 
appointment of Himmler Reichsfuehrer of the SS and chief of 



63 



police, to the additional position of minister of the interior of 
the Third Reich. This was seen by Bormann as a threat to his 
control of the 42 Gaue, or districts, whose leaders reported 
directly to him. Albert Speer also perceived it as a potential 
dissolution of Bormann's domestic power base, so he looked 
anew to Himmler as the one who could accomplish what he 
had failed to do — win out over Bormann in the political infight- 
ing for control of the domestic economy. Himmler attempted 
to pull the Gauleiters into line by sending them orders through 
district SS commanders. The Gauleiters complained to Bor- 
mann, who had Hitler prohibit any more such steps. Himmler 
immediately pulled out, and the Himmler-Speer alliance came 
to an end. 

Martin Bormann was now sole leader on the domestic front, 
and he went further to strengthen his hold over the economy. 
The aging, old-line Gauleiters were replaced with his new breed 
of administrators, typically with legal training, to handle the 
complex matters of an economy that, since the fall of Stalingrad 
on February 1, was moving rapidly into full war production. 
Each district leader had committees constantly surveying the 
entire spectrum of his regional economy. There were committees 
on insurance, electric power, steel, coal, and industry in general. 
Their reports went directly to Bormann, who dictated the direc- 
tives that kept the economy in tune with his thinking. When- 
ever Albert Speer would try to expand his area of armament 
production, he would receive a curt memorandum from Martin 
Bormann to desist. Speer attempted to bring into his ministry's 
jurisdiction the Peenemiinde rocketry production, and sent Hit- 
ler a request to this effect. The reply was negative and bristling, 
and came not from Hitler but from Reichsleiter Bormann. 

In 1943 Bormann moved to control banking by expanding 
regional economic committees into the financial field under his 
department III-B, a unit covering finance and special fiscal 
projects of a highly confidential nature to which his district 
economic advisors belonged. 

Reichsleiter Bormann's move to place the banking structure 
of the Third Reich in his domain was understandable, for 
without the banks he couldn't exercise full control of industry 
and the economy. In the last years of the war, big banks had 
nearly all German industry under their control. This was done 



64 



in several ways: through ownership of stock and the right to 
vote stock owned by others; through bank officers and stock- 
holders sitting on the boards of the big corporations, and, in 
turn, including representatives of the largest corporations on 
their boards. Then, when limitations to the size of the boards 
were mandated, they continued to extend their sway over 
German industry by setting up regional committees, Landes- 
ausschuesse to which leading industrialists in the various regions 
would be invited to belong. It was considered a great honor to 
do so, with the opportunity to attend two or three meetings a 
year at large dinners, to which officers of big banks would jour- 
ney from Berlin. 

Thus, the big Berlin banks maintained their influence over 
all parts of German industrial life. When a law was passed 
limiting the number of directorships any one man could hold, it 
put the small bankers at a disadvantage because the big banks 
could divide their directorships among the many members of 
their management. Also, by putting officials of leading indus- 
tries on the regional committees, which were not limited in 
number, and which in the case of the Deutsche Bank listed 
several hundred members, they were able to spread their influ- 
ence even further. 

By inviting the local industrialists to serve on these com- 
mittees, they, of course, obtained the business of such com- 
panies and would extend credit to the companies, when needed. 
They obtained further control over industry through their 
ability to call in the money due under the credits they extended 
to the local industrialists. By these means, the big banks con- 
tinued to an increasing extent to capture the customers of the 
small private banks. 

For these reasons, the district economic advisors of the party 
urged Bormann to assume control of the big banks. The smaller 
regional banks and their customers were unhappy over the 
domination exercised by the large Berlin banks, and resented 
having all their banking decisions now referred by regional pri- 
vate banks to head offices in Berlin. Bormann was agreeable to 
such a move: it would give him greater influence with all major 
banks, and he foresaw needing at a later date their good will and 
assistance in moving capital around the world. 

The major corporations did not mind Bormann applying addi- 



65 



tional checks on the banks, which they thought had become too 
domineering and cavalier toward their own needs. They were 
aware that German banks administered 70 percent of the capital 
of all German stock companies. 

At the same time, many large corporations held large blocks 
of stock in the very banks that served them. Siemens & Halske 
A.G. of Berlin, a giant electronics firm with many subsidiaries 
and extended worldwide (the General Electric of Germany), 
had bought into Deutsche Bank in 1930 during the economic 
crisis. It held 1 million marks of Deutsche Bank stock until 
selling it in 1942. It was a quiet deal, Siemens & Halske not 
wanting its competitors to know about its insider position. At 
annual meetings the firm always had "neutral parties," a notary 
public, a lawyer, or some friend of the bank vote its stock. 

A like situation prevailed with H.F. &Ph.F. Reemtsma, an 
international tobacco firm located in Hamburg. It had acquired 
5 million Reichsmarks of Deutsche Bank stock during the same 
banking crisis of 1930, but held on to it through the years. In 
later days, the bank asked Reemtsma to buy several million 
more shares of its stock that was floating in the market, inas- 
much as Deutsche Bank was not permitted to buy its own 
shares. In appreciation, the bank extended guarantee facilities 
to Reemtsma to cover cigarette tax stamps of 25 million marks. 
Again, the stock was voted anonymously for Reemtsma by 
neutral parties. 

I.G. Farben, however, was of such size and generated so much 
cash flow of its own that it didn't need to hold bank stock to 
extract favorable treatment. It could tell its prime bank what to 
do and how to do it at any time. Hermann Schmitz, president 
of the management of I.G. Farben during twelve years of the 
Third Reich and an early Hitler supporter, once told Nurem- 
berg investigators how Deutsche Bank functioned for I.G. 

"The banking transactions performed by Deutsche Bank were 
mostly in collection of money from customers. They always 
led the syndicate of banks when increases of capital and issue of 
debentures were necessary. Generally I tried not to arrange loans 
with banks. I made one exception when I arranged a revolving 
credit of something like RM 170 million in 1942 for General 
Motors which could be repaid and taken up again over a period 
of time. This credit was intended to be used in the beginning of 



66 



1945 but because of the difficulties of that year it could not 
be used." 

Schmitz said that Deutsche had become their primary bank 
because it "was the bank with the old relations with the Bad- 
ische Anilin and Soda-Fabrik and Farbwerke vorm. Friedr. 
Bayer & Co., and when I.G. Farben was created in 1925 it was 
natural that the Deutsche Bank continue relations. It is also the 
reason that I.G. Farben always asked one member of the 
Deutsche Bank to come on the board of I.G. Farben. First it 
was Schlieper, then Schlitter, Mosler, and later on Abs." 

All banks, in all countries, work together. Bankers relate to 
each other, even if they often to fail to understand what moti- 
vates their customers and the public in general. In Germany, the 
big banks were the money machines that insured the silent 
financing of the war Hitler was planning. In order of fiscal 
strength and importance, Deutsche Bank led the Big Three, 
followed by Dresdner and Commerzbank (the standing of the 
three still today in the Federal Republic of Germany; Fortune 
magazine places these among the 50 largest commercial banks 
in the world outside the United States). 

Here is an explanation of the type of industrial funding by the 
big banks to produce the behind-the-scenes financing of the 
war, related by a participant of the management of Deutsche 
Bank. It is fairly representative of loans continually made to the 
munitions industry throughout the war by all big banks: 

Loans to the aircraft industry in 1943 amounted to some 150 million 
Reichsmarks. Of the long term Government guaranteed loans, some 
22 million went to Bavarian Motor Works and about 10 million to 
Daimler-Benz. Dornier received six million RM (of a syndicate 
credit of 60 million) without Government guarantee, covered by 
assignment of Government orders in 1943. A similar loan of 15 
million Reichsmarks was given to BMW in 1944. Daimler-Benz also 
had a 15 million loan of the latter type, but did not draw on it until 
the closing months of the war. There was a large loan to the Frank- 
furt affiliate of the Verein Deutscher Metallwerke for aircraft pur- 
poses. I do not recall the amount, but it was substantial. 

The Martin Bormann Nazi Party Committee on Banking 
consisted of ten district industrialists and bankers. The chair- 
man of the committee was Hellmut Boernicke, who was 



67 



general manager of the Brandenburger Provincial Bank and 
on the board of Deutsche Bank. Another member was Hein- 
rich Huncke, who was president of the Chamber of Com- 
merce in Berlin, on the management committee of Deutsche 
Bank, and an economic advisor of the Berlin district of 
the National Socialist Party. Another was Wilhelm Avieny 
of Frankfurt, where he was also economic advisor to the party 
and a management member of the Metallgesellschaft. There was 
Walter Jander of Dessau, who was with the Junkers Werke; 
he was on the board of Commerzbank and was economic advisor 
of Dessau. Walter Rafelsberger of Vienna was party economic 
advisor for Vienna. He was an engineer, but had a seat on the 
board of Creditanstalt-Bankverein of Vienna (owned by Reichs- 
and Deutsche Bank), Wolfgang Richter, an economic advisor 
for the Sudetenland and manager of the Braunkohlen Syndicate 
of Mitteldeutschland. Julius Maier served as economic advisor 
of Hanover. He owned the private bank of Hanover, Julius 
Maier & Company. There was Dr. Walter Schieber, economic 
advisor for Thuringia. He lived in Weimar and was manager 
of an artificial wool company in Schwarza, and a member of 
the board of directors of the Dresdner Bank during the final 
months of the war. Christian Franke, economic advisor for 
Muenster and Westphalia, North, was also president of the 
Muenster Chamber of Commerce and head of a large lumber 
company. Karl Heinz Heuser served as an alternate to Huncke 
on the Bormann Nazi banking committee, and also served as an 
alternate economic advisor for Berlin. 

This banking committee not only had government access to 
all German bank operations and a degree of control, but it also 
placed representatives on the boards of each bank. The big 
banks did not object, merely insisting that these men not be 
party hacks but party professionals who had a feel for and 
understanding of finance. The bankers of Germany have always 
looked to the seat of their government for guidelines, and if 
this was what Bormann wanted they would go along. From the 
Fuggers of the sixteenth century or the Rothschilds of the 
eighteenth century, bankers in Germany could make or break 
governments, and did. But during the era of the Third Reich, 
their period of enormous power, they had become virtually a 
second government. Bank chairmen were consulted by the Nazi 



68 



Party on every economic and financial question that arose. 
Baron Kurt von Schroeder, a well-known banker of Cologne 
during these years and an economic advisor to Bormann's eco- 
nomic committee, commented that Dr. Hermann Josef Abs, 
chairman of Deutsche Bank, was particularly important to the 
government of the Third Reich. 

"His influence was mainly with the Reichsbank and with the 
Ministry of Economics. Abs proved very valuable to the party 
and to the government by using his bank to assist the govern- 
ment in doing business in the occupied countries and in other 
foreign countries. Abs enjoyed excellent relations with Walther 
Funk, who was both president of the Reichsbank and head of 
the Ministry of Economics." 

Walther Funk stated that the bankers and banks of greatest 
importance in German financial af fairs abroad were "Abs 
(Deutsche Bank), Goetz or Rasche (Dresdner Bank), Rode- 
wald (Reichskreditgesellschaft), Radort (Aerobank) ." Funk 
added that this last-named bank, the Bank der Luftfahrt (Aero- 
bank), "confined its activities largely to the monetary af fairs of 
France and Norway. But Deutsche Bank and the Dresdner 
Bank had few limitations on their activities, due to their world- 
wide associations and prestige in finance." Even within their 
own organization, much of their personnel reflected the Nazi 
Party. Branch managers of Deutsche Bank were to a man mem- 
bers of the party; of course, management insisted that all be 
first-class bankers, men who had come up through the Deutsche 
Bank ranks to positions of authority. 

While the Big Three of German banking were vital to the 
funding of the German war machine, both before and during 
the war, Deutsche Bank was much more so, for it was the lead 
bank in establishing economic authority over the banks and 
corporations of the occupied countries. When the German 
armies were preparing to invade the Lowlands and France, 
Deutsche Bank submitted to the Ministry of Economics its plan 
for insuring economic control over nations about to be overrun 
by the Wehrmacht. Like I.G. Farben and its "New Order" for 
the European chemical business, Deutsche Bank's plan was also 
named Neuordnung. It was approved by the Ministry of Eco- 
nomics and the Reichsbank, and when German armies moved 
Deutsche Bank followed. 



69 



In Belgium, control was assumed by establishing banking 
subsidiaries of the big German ones, which also bought majority 
control of existing Belgian banks. The Deutsche Bank already 
had its own branch in Brussels and was doing business as usual 
on May 19, 1940, when German troops marched into the city 
and proceeded to give a band concert in the Grande Place — it 
being a sunny afternoon. Dresdner Bank bought majority inter- 
est in Banque Continentale of Brussels and Antwerp; the Bank 
der Deutschen Arbeit bought into Banque de l'Ouest in Brussels; 
Commerzbank moved in on Banque Hanseatique of Brussels. 

In Holland, German banking exploitation was achieved simply 
by having the Deutsche Bank, which had long been interested in 
Handelmaatsschappj, increase its holdings in H. Albert de Bary 
&Co., Inc. The Berliner Handelsgesellschaft increased its hold- 
ings in the Hollandsche Koopmansbank. The Bank der Deut- 
schen Luftfahrt acquired all shares in N.V. Hollandsche 
Buitenland Bank, while several other German financial institu- 
tions secured majority shares in Rodius Koenigs Handel Maat- 
schappin. Three subsidiaries were established by Dresdner Bank. 

Deutsche Bank bought majority control of Bohmische Union 
Bank of Prague and the Banca Commerciale Romana of Bucha- 
rest and 30 percent ownership of the Banque Generale de 
Luxembourg. It purchased controlling shares from banks in 
Belgium and Paris, which up to that time had owned these 
banks of Prague, Bucharest, and Luxembourg. The Societe Gen- 
erale de Belgique of Brussels and the Banque de l'Union 
Parisien of Paris, which owned these banks, sold their shares to 
Deutsche Bank. In much the same way, this German bank 
bought majority stock from Belgian and French majority share- 
owners of Columbia Oil and Concordia Oil, both Romanian 
joint stock companies operating these oil-producing plants of 
Romania. 

These economic penetration specialists of the Third Reich 
handled France similarly, with but a slight dif ference. In the 
years before the war the German businessmen, industrialists, 
and bankers had established close ties with their counterparts 
in France. After the blitzkrieg and invasion, the same French- 
men in many cases went on working with their German peers. 
They didn't have much choice, to be sure, and the occupation 
being instituted, very few in the high echelons of commerce and 



70 



finance failed to collaborate. The Third Republic's business elite 
was virtually unchanged after 1940. Jewish businessmen, of 
course, were penalized for being just that, along with those who 
joined de Gaulle. The Vichy government, and the occupation 
government under German domination, was run by "notables," 
people who had already made it in public administration, com- 
merce, finance, and the professions. They regarded the war and 
Hitler as an unfortunate diversion from their chief mission of 
preventing a communist revolution in France. Antibolshevism 
was a common denominator linking these Frenchmen to Ger- 
mans, and it accounted for a volunteer French division on the 
Eastern Front, which in actuality was useful only as propaganda 
for the Germans. Hitler never thought much of the volunteer 
divisions of occupied Europe, dismissing their existence with, 
"We will rise by ourselves." 

The upper-class men who had been superbly trained in finance 
and administration at one of the two grand corps schools were 
referred to as France's permanent "wall of money," and as 
professionals they came into their own in 1940. They agreed to 
the establishment of German subsidiary firms in France and 
permitted a general buy-in to French companies. In 1941, 
French banks sold a large part of their holdings in the industrial 
and banking enterprises of central and southeastern Europe; 
after all, they reasoned, the German armies were already there, 
which secured French interests; and half a loaf is better than 
none. 

In Paris the usual direct penetration took place by shareowner 
control of such as Worms et Cie. (now Banque Worms Group), 
the Banque de Paris et des Pays-Bas, Banque Nationale pour 
le Commerce et l'lndustrie (now Banque Nationale de Paris), 
and Banque de l'lndo Chine (now Banque de l'lndo Chine et 
de Suez Group). 

On May 23, 1940, all French banks operated under the Ger- 
man banking administration, and fiscal operations came under 
the supervision of Berlin auditors. When the Japanese bombed 
Pearl Harbor on December 7, 1941, and President Roosevelt 
announced that the United States was at war with Japan and 
Germany, the branches of American banks in France came 
under German control and were closed, except for two American 
banks: Morgan et Cie., and Chase of New York. Both received 



71 



this special treatment through the intercession of Dr. Hermann 
Josef Abs of Deutsche Bank, financial advisor to the German 
government. According to U.S. Treasury agent reports, the favor- 
able treatment was due to an "understanding relationship" be- 
tween Lord Shawcross and Dr. Abs. Sort of an "old school tie," 
an unspoken understanding among international bankers that 
wars may come and may go but the flux of wealth goes on 
forever. Lord Shawcross was, and is, a British financial leader in 
the City of London, a distinguished barrister, and a board mem- 
ber of many international firms; he had also been serving as 
special advisor to Morgan Guaranty Trust of New York, and 
to their French and Spanish banks. Morgan et Cie. and Morgan 
et Cie. Internationale SA. and Chase of New York had their 
own ties to Abs. Lord Shawcross was later to become chief 
prosecutor for the United Kingdom before the International 
Military Tribunal at Nuremberg. He was to have many friendl y 
conversations with Dr. Abs, who was under house arrest for a 
time in 1945. Both Lord Shawcross and Dr. Abs were to work 
together again in the 1950s in jointly sponsoring an interna- 
tional organization named "Society for the Protection of For- 
eign Investments of World War II," with headquarters in 
Cologne, West Germany-all this according to testimony and 
documents submitted to the U.S. Justice Department and a 
Senate committee in Washington. 

Meanwhile, in 1940, Jewish banks in France (such as Banque 
Transatlantique, Lazard Freres, and Rothschild Freres) and 
many a more modest Jewish firm engaged in the securities busi- 
ness and in international operations were seized, but were all 
returned to rightful ownership after 1945. 

In both Belgium and France control of banks gave the Ger- 
mans control of industry because banks could vote the shares 
they held in commercial firms, determining management's col- 
laboration in manufacturing products for use in Germany. Con- 
trol of both banking and industry in occupied countries was 
therefore essential to continued effective domination of a nation. 
People depended on factories and commercial establishments for 
their livelihood; they needed banks to cash paychecks and for 
their savings, as well as to lend them money for business expan- 
sion and home mortgages. Those eliminated from this economic 
circle suffered severely. With no jobs and no savings, they con- 



72 



stituted a minority society of social and economic outcasts. 
Some turned to the Resistance-not too many until Allied troops 
were at the gates. On the other hand, as part of the "carrot," 
compliant workers in factories and employees of banks received 
part of an increased salary scale in food bonuses, so that they 
and their families survived the occupation in better style. 

Hitler could af ford to strip these countries of 153 divisions 
and send them to the Eastern Front in 1941. Thirty-eight divi- 
sions were enough for the Lowlands, Belgium, and France: bank 
control and the police, both German state secret police and the 
local police who worked for them, did the rest. 

In Holland, because the big local banks did not have stock 
ownership of the firms they financed, Deutsche Bank specialists 
approached the industrial problem in a dif ferent way. They 
bought into the key firms much as they would go about nego- 
tiating a takeover in peacetime, except that their hole card was 
the German army. 

As one example, AKU (Algemcene Kunstsijde Unie N.V., 
of Arnheim, Holland) was a chemical firm, which had been 
formed in 1929. It owned outright an important subsidiary, 
Vereignigte Glanzstoff, among other properties. In Germany 
the Dutch-owned subsidiary was Vereinigte Glanzstoff-Fabriken 
A.G., of Wuppertal-Elberfeld. The Germans already held a 
minority interest in AKU and V.G. But Deutsche Bank and 
Reichsbank wanted majority control, not only for the benefits 
it would provide to German war production in Holland, but for 
the increased profits that would flow to German shareowners. 
This is how the transition was accomplished: AKU had com- 
mon shares and preferred shares; the latter, which had the bigg er 
voting rights, were all in the hands of members of the board of 
AKU. The first move was to change the composition of the 
board. The German Ministry of Economics, in the person of 
Hans Kehrl, asked a Cologne banker, Kurt Freiherr von Schroe- 
der, to join the board of AKU and of Vereinigte Glanzstof f. 
Upon becoming a board member of AKU, Schroeder received 
6,000 florins of shares (6 shares of 1,000 florins each). He re- 
ceived these as a trustee and as a member of the board. At the 
beginning of the war there were eight members on the board of 
AKU: three Germans and five Hollanders. The chairman of 
the board was Mr. Fentner van Vlissingen; the vice chairman 



73 



was Dr. Abs of Deutsche Bank. Deutsche Bank controlled many 
of the AKU shares and had a leading position in the Vereinigte 
Glanzstoff. Liaison between the two companies was carried on 
by Vaubel. The eight men holding the priority shares were all 
now in a consortium. The Germans dominated this consortium, 
although technically the Dutch had a 50 percent interest. Before 
each meeting, when the shares had to be voted, it was decided 
how they could vote. The shares of the trustees had to be voted 
the same way. The German holders were trustees for the Verei- 
nigte Glanzstoff. The Germans, such as von Schroeder, who 
had received their shares at no cost, were obligated to turn back 
their stock when they left the board. They were merely trustees, 
and voted on order for V.G., as did the priority shareholders. 
Before board meetings, owners of the priority shares received 
letters from the Deutsche Bank or V.G. management telling 
them how they should vote. The eight priority shareholders 
each held six priority shares valued at 48,000 florins. Before each 
meeting Dr. Abs and Mr. van Vlissingen held a short con- 
ference, at which time the course the voting should take was 
outlined. The leading figure was Abs; van Vlissingen would 
deliver the instructions as initiated by Abs. 

Kurt von Schroeder said the Dutch members did as the Ger- 
man government desired. "They never made difficulties. Abs 
was the leading man because of the majority of the shares he 
controlled in the consortium." 

There were three American companies, North American 
Rayon Corporation, American Bemberg Corporation, and Amer- 
ican Enka, all subsidiaries of Vereinigte Glanzstoff subsidiaries. 
American Bemberg was a subsidiary of J.P. Bemberg A.G., itself 
a subsidiary of Vereinigte Glanzstof f. After the war began, it 
was difficult to manage the three American companies from 
Germany. An ef fort was made to have the American subsidi- 
aries appear to be under Dutch rather than German control. 
The consortium of V.G. and AKU, however, continued receiv- 
ing annual reports and the profits from the American firms 
placed on deposit to accounts in Switzerland, through Swiss 
subsidiaries. (In the 1950s, both AKU and Vereinigte Glanz- 
stoff were reshuffled and became part of a Dutch holding com- 
pany, AKZO NV. AKU today is AKU-Goodrich, and Vereinigte 
Glanzstoff has been absorbed into the American Enka Company 



74 



of North Carolina. All continue profitable for AKZO NV and 
the Dutch and German shareholders.) The original move for 
control in 1941 was prompted by the German need to increase 
the production of artificial wool and cellulose. To fulfill this 
AKU needed more capital, for the construction of a new plant 
for the artificial wool, and it had to found a new company, 
SOVE, to produce increased cellulose. Deutsche Bank agreed 
to increase the AKU capital by 10 million florins with nonvoting 
certificates in Germany, retaining the original shares with its 
voting rights. Any who bought the certificates received the 
same dividends and had the right for one time only to change 
the certificates for original shares. Deutsche Bank, with its 10 
million florin shares of capital with voting rights, was in com- 
mand, but it was not until it bought additional shares of AKU 
in Holland that it held a majority of the total shares. The AKU 
shares against which certificates were issued by the Deutsche 
Bank were deposited with the Deutsche Bank Filiale Hamburg; 
in the amount of 27,762,900 florins with German stamp and 
3,444,400 florins without German stamp were the amounts ex- 
changed for certificates by the Deutsche Bank at that time, 
when AKU was reorganized in 1942. 

If all this seems devious in a war of shot and shell, it is. But 
such a form of control was necessary to the long haul of occupa- 
tion, in which the Third Reich envisioned a peaceful, prosper- 
ing community of nations within their Fortress Europe. 
Commerce and industry had to go on, and profits had to flow 
with benefit to all involved parties and shareholders, if a com- 
mon market under German direction were to succeed and com- 
munism were to be held back. 

Once Martin Bormann had the German banks assume ma- 
jority control of the fiscal apparatus of each overrun country 
and of the corporations of special worth to them, the German 
"Four- Year Plan" was the next step in total administration, 
determining precisely which individuals were to direct these 
enterprises in the occupied areas; also, into which German 
sphere of requirement such should fall. 

In Holland, the overall administrator of the financial and 
economic plan was Dr. Hans Fischbock. The Luftwaf fe took 
charge of the electronics firm of Phillips, which had become 
a prime supplier. Phillips of Eindhoven was likewise used for 



75 



special wireless projects, thanks to its astounding capabilities in 
the manufacture of electronic communications and radar equip- 
ment. One such was to engineer equipment that would monitor 
the telephone conversations between Prime Minister Churchill 
and President Roosevelt. 

In 1940 AT&T and their Bell Laboratories had developed a 
device for secret telephone transmissions between the president 
of the United States and the prime minister of Great Britain. 
This so-called X- System was the first speech encoding tech- 
nique that could be deciphered only at the point of intended 
reception. Churchill, from his command post beneath 
Westminster, would speak into a specially contrived handset; his 
words were encoded with electronic pulses called "key signals," 
and transmitted by short-wave radio; received at AT&T head- 
quarters in New York City, they would then be transmitted to 
the White House, where the key signals would be deleted; thus 
the listener, the president, would hear only the perfectly clear, 
original message. It was a giant leap forward in telephone con- 
fidentiality, developed by Robert C. Mathes, Ralph K. Potter, 
and P.W. Blye, Bell engineers. 

But this unique invention of telephonic radio scrambling was 
about to lose its confidentiality. In 1941 a Gestapo agent withi n 
the British intelligence structure sent a coded report to General 
Mueller in Berlin that top secret information affecting the course 
and outcome of the war was being regularly exchanged over the 
ether between Churchill and Roosevelt. Although it is true that 
British intelligence had penetrated the German General Staf f, 
it is equally true that General Mueller had his mole inside 
Britain's Secret Intelligence Service, a fact unknown to either 
the British or Admiral Canaris of the Abwehr, who was leaking 
information secretly to General Sir Stewart Graham Menzies, 
head of MI-6. 

General Mueller's agent was Charles Howard Ellis, a top- 
level British career intelligence officer who also served as a Nazi 
double agent throughout World War II. At the time of his 
tipoff to General Mueller, Ellis was in New York as second in 
command to Sir William Stephenson ("A Man Called In- 
trepid"), who was doing his best to move the U.S. into war 
against Germany with a combined propaganda and British spy 
operation and who later assisted in the formation and training 



76 



of the American OSS. Charles Ellis learned of the Roosevelt- 
Churchill telephone conversations from Stephenson, who was 
a frequent visitor to the White House. Ellis sent his message to 
Mueller through Gestapo channels via Mexico City to Buenos 
Aires, where it was beamed to Hamburg by one of the clandes- 
tine German transmitters in that capital. The Ellis report was 
quickly taken by General Mueller to Reichsleiter Bormann, 
who promptly told Hitler about it. The Fuehrer ordered Bor- 
mann to do whatever was necessary to unscramble these con- 
versations and provide him with transcripts within hours of their 
occurrence. 

Under the direction of Group III of the Berlin cipher section, 
Bormann instituted a hurry-up program, and after many months 
of intensive work and many millions of Reichsmarks spent by the 
research institute of the Deutsche Reichspost, Dr. Ohnsorge, 
minister of postal services, informed Bormann that a sophisti- 
cated installation would enable them to unscramble undetected 
the telephone conversations between the two Allied leaders and 
place them in clear, listenable context. The task was described 
by German cryptologist Wilhelm F. Flicke: "Just imagine you 
are standing on the edge of a seething volcano, with a dozen 
yelping dogs just behind you and with a few wolves and lions 
howling and roaring at the other side of the crater. Add a gentle 
whistle to this sound mixture and you have an idea of what 
scrambled speech is like and what German engineers had to 
penetrate before they could extract words." 

The chief German electronics engineer who developed this 
counterachievement of the Deutsch Reichspost was Herr Vet- 
terlein. In September 1942, under his direction, the Dutch 
engineers of the newly captive firm of Phillips at Eindhoven 
constructed the necessary installation in a monitoring station, 
on a spit of land close by The Hague. 

Hitler was delighted each time Reichsleiter Martin Bormann 
placed on his desk a transcript only hours after the American 
president and the British prime minister had held one of their 
transatlantic conversations. Bucked up by the ingenuity and 
patriotism of his German inventors, he expressed thanks to the 
Phillips engineers. "Their work alone in this matter made the 
taking of Holland worthwhile," he is said to have remarked to 
Bormann. Indeed it did, for it gave Hitler a window into the 



77 



workings in London and provided him with the certain knowl- 
edge that there would be no Second Front in 1943, leaving him 
free to shift further divisions from the Westwall to the Eastern 
Front. The many hundreds of British and Allied agents sacri- 
ficed by the British in France and in the Lowlands to convince 
the Germans there would be a Second Front in 1943 makes a 
dismaying footnote in the history of World War II. Not until 
February 1944, months before D-Day, did British intelligence 
discover that its worst security leak was at the top of the pyra- 
mid, and order the Royal Air Force to destroy the Nazi moni- 
toring station in Holland. 

Bormann's Four- Year Plan proceeded like clockwork in West- 
ern Europe, and the Germans made a special effort to apply the 
same to the countries of southeastern Europe. Before World 
War I they had large holdings in public loans, railways, banks, 
mining, oil, and other industrial interests in this part of the 
world. As a condition of the peace treaties following World 
War I, Germany forfeited it all, and furthermore had to pay 
retributive reparations to those countries that had taken the side 
of the Allies. Part of the Austrian and Hungarian holdings, 
especially in the heavy and armaments industries and in b ank- 
ing, were taken over lock, stock, and barrel by France and 
Great Britain, as well as by Belgium, Switzerland, and other 
nations. Thus, up until 1934, what was left to Germany was 
minuscule; they held only 1 percent of the total foreign invest- 
ment in Yugoslav industry and less than 1 percent of the total 
foreign investment in Yugoslav banking. 

With the advent of National Socialism, perceived as a saving 
grace, and the concomitant era of renewed German production, 
trade, and Reichsmark diplomacy, the Fatherland once again 
became a force to be reckoned with in southeastern Europe, 
drawing it into the Nazi orbit. In 1941, when German armies 
slashed through the Balkans to the Aegean in five weeks, the 
administrators of the Four- Year Plan moved to exploit this 
region in a businesslike manner. They carried out the financing 
and development of important raw materials in Yugoslavia, 
Romania, and Bulgaria. For this they utilized the skills of 
German industrial firms to extract maximum benefits from the 
mining, steel, and petroleum industries. Deutsche Bank, D res- 
dner Bank, and Commerzbank had already gained majority 



78 



control of the principal banks and industrial corporations of 
these countries by buying sufficient shares from their principal 
shareowners, French and Belgian banks. 

A similar pattern was developed for Luxembourg, a country 
smaller than Rhode Island, whose principal industry is iron and 
steel. The Germans annexed Luxembourg, as they did Alsace- 
Lorraine, and it became an administered territory, like Poland, 
Belgium, and Holland, where local nationals did not serve as 
government. Gustav Koenigs, chairman of Hamburg- Amerika 
shipping line and a director of many companies, was appointed 
Reich trustee of ARBED, an important Luxembourg steel car- 
tel, by the German Ministry of Economics. There were in 
ARBED 250,000 shares outstanding, the majority held by Lux- 
embourgers, Belgians, and French, in that order. German share- 
holders, largely through their banks, accounted for 54,747 
shares. Some were held by British and Americans through their 
secret accounts in Swiss banks. A shift in control was made 
when Gustav Koenigs, as Reich trustee, also became trustee of 
the Belgian- and French-held shares. On April 19, 1943, a share- 
holders' meeting was held in Luxembourg city, and the capital 
of the company was converted from francs into Reichsmarks. 
ARBED was recapitalized at 300 million Reichmarks ($120 
million), and under German direction the cartel became the 
third largest iron and steel company in Europe, ranking behind 
only Germany's Vereinigte Stahlwerke and the Goering Steel 
Works. A sales company was then formed under the name of 
Luxembourg Iron & Steel Company to market all ARBED 
products throughout Europe. It was capitalized at RM 1.5 
million. To further tighten German control over the iron and 
steel output of this small, mountainous country, all of the iron 
mines in Luxembourg were combined and amalgamated into 
one unified association under German direction. This associa- 
tion was named "Luetzellurg," and its advisory board was ap- 
pointed by the chief of the German civil administration. Gustav 
Koenigs, as Reich trustee of ARBED, served as president of 
Luetzellurg. 

The two principal German banks, Deutsche Bank and Dresd- 
ner Bank, had assumed 73 percent ownership of the Banque 
Generate de Luxembourg and the Banque International de 
Luxembourg in May 1940. They bought majority shares of the 



79 



two Luxembourg banks from the Belgian and French banks, 
where they had increased their shareholdings to a controlling 
interest. Both Commerzbank and the Deutschen Arbeit banks 
established branches in Luxembourg. 

In dealing with all other aspects of the economy of occupied 
countries, the Germans were just as thorough. In 1939, the 
British insurance companies held nearly half of the French port- 
folios, amounting to 90 billion francs, or about 11,800 million. 
When France fell, all British insurance offices in both occupied 
and unoccupied France were closed and by agreement with the 
French Insurance Department in Vichy, and the German Cen- 
tral Organization of Insurance Carriers, a full concession was 
issued by France to German insurance companies. The Munich 
Reinsurance Company had already penetrated France before 

1939 through the Societe Anonyme de Reassurance of Paris. In 

1940 Nordstern of Germany acquired most of the British busi- 
ness. The heavy industries of France were put to work for 
Germany, as was the iron and steel industry in Alsace-Lorraine. 
By 1941 there was great bitterness in France toward the British, 
anyway. It appeared to the French now that most Allied mili- 
tary successes seemed to involve French losses. First, there was 
the British invasion of Syria in June 1941. Then the British 
blockade of the Continent began, causing grievous food and fuel 
shortages in France, although had the German occupation au- 
thorities not drained so much food from the French economy 
and diverted it to Germany the shortage would have been 
manageable. On March 3, 1942, the British bombed the Renault 
works in the Paris suburb of Boulogne-Billancourt, which caused 
great damage and civilian casualties. Also, the Vichy French 
were still smarting from the seizure of two battleships, four light 
cruisers, two submarines, and about two hundred small craft at 
anchor in Portsmouth and Plymouth. But the shelling and 
bombing of the battleships Bretagne, Dunkerque, and Provence 
at Oran, and the Richelieu at Dakar, along with lesser vessels, 
turned Britain into an enemy of Vichy France, although Chur- 
chill was wise to order the attacks to keep this naval force from 
falling into German hands. If they had — and German plans 
were being made to seize the ships and man them with German 
and Italian crews — the battle for the Mediterranean and the 
Atlantic would have swung in Germany's favor. 



80 



Against this background, and with the schism between France 
and Britain, France looked to Germany rather than to Britain. 

The economic penetration of the neutral nations was handled 
differently by German corporations and banks. They continued 
to move in tandem, I.G. Farben and Friedrich Krupp, A.G, to 
name only two major ones with worldwide interests, and manu- 
factured and sold their products while participating banks han- 
dled the funding and the collection of money, according to 
terms of contracts between manufacturer and principal. 

Hermann Brombacher, manager of the War Material Export 
Branch of Friedrich Krupp A.G. in these war years, stated that 
all contracts for export had to be passed on by two government 
agencies, A.G.K. (Ausfuhr Gemeinschaft Kriegsgerat) and 
O.I.W. (High Command of the armed forces). Brombacher 
said that foreign business was handled in the following manner: 

"All companies competing for a f oreign contract would notify 
A.G.K. of the facts of their bid. A.G.K. had the power to deter- 
mine if a particular company's prices were right. One company 
could not offer a price lower than that of another German firm, 
on the same product. The contract would usually go to the 
company having the best name or the one preferred by the 
foreign government. The companies who were then unsuccess- 
ful in the bidding would often be licensed by the company 
securing the contract to fill part of the order. T he company 
receiving the order would be called the leader of the syndicate 
or 'consortium,' and would often license the other companies 
to aid them." 

Brombacher gave as one example a 1937 Krupp contract with 
Brazil for the delivery of certain types of war materials. "To 
secure this contract and to introduce its products there, Krupp 
had several representatives in Brazil (namely, Bromberg &Co.). 
Rheinmetall-Borsig, Krupp's main competitor for the business, 
also had representatives in Brazil. When Krupp secured the 
contract, Rheinmetall was then ordered by A.G.K. not to com- 
pete with Krupp in Brazil. The expenses of Rheinmetall's repre- 
sentatives were ordered paid by A.G.K. out of the expense clause 
of the new contract." 

As an insight into how Krupp operated its vast armaments 
business during World War II (in contrast to World War I, 
when it had to import precision instruments from Switzerland), 



81 



Brombacher stated, "In the Second World War we had our own 
German sources for the photoelectric and radar fire controls 
used for our guns. We were supplied by the German firms of 
Siemens &Halske A.G. and Siemens-Schuchert-Werke A.G. All 
optical devices were built by Carl Zeiss." 

He added that Krupp had also shifted from being mass sup- 
plier of the German war machine to being primarily a develop- 
ment and invention agency for weapons that were then mass 
fabricated by other manufacturers. 

While supplying weaponry to other countries on the O.K.W. 
approved list, Brombacher said they didn't let the war interfere 
with profits. He explained one gun contract Krupp had with 
Holland. Krupp had not finished building the border defense 
guns Holland wanted under terms of their contract, "so Krupp 
loaned Holland some big defense guns on a cash rental basis." 
When the German army rolled over Holland in May 1940, 
although it wasn't much of a roll-over because the borders were 
thinly patrolled and the way had been smoothed by the German 
Citizens' Association (the A-O), "the rented guns were re- 
possessed by Krupp and later sold to the Italians." 

The expansion of the German economy despite war produced 
a new Reichsmark diplomacy that made a profit for everyone 
involved: the corporations, the banks, their shareholders, the 
Reichsbank, the government of the Third Reich; and in coun- 
tries where sales were made the business elite prospered, as did 
the middlemen who handled the goods and the tradesmen who 
sold to consumers. It was a golden circle of Reichsmark diplo- 
macy, which had its ef feet on foreign policy and the conduct 
of the war. 

Consider Turkey, and the reasons that it remained outside 
the Allied fold until the waning days of the war. The Big Three, 
Roosevelt, Churchill, and Stalin, all agreed it would be desirable 
to have Turkey in the war in 1943. But they didn't have Reichs- 
mark power; they didn't have the guns and aircraft and diverse 
consumer products Turkey craved. In short supply themselves, 
they were carefully stockpiling any excess war equipment for 
1944 and Operation Overlord. So they attempted rhetorical 
diplomacy. 

Winston Churchill had Anthony Eden meet with a Turkish 
delegation on November 23, 1943, the time of the Churchill- 



82 



Roosevelt Cairo Conference, which took place on the eve of 
their meeting in Teheran with Josef Stalin. Foreign Secretary 
Eden had persuaded a Turkish delegation to come to Cairo. At 
the meeting he pointed out the urgent Allied need for Turkish 
airbases, and the advantages that would accrue to both sides if 
Turkey entered the war on the side of the Allies. The Turkish 
delegation sat through this discourse unmoved. They said that 
granting of airbases to the Allies would be an act of intervention, 
and that nothing could prevent German air strikes on Constanti- 
nople, Ankara, and Smyrna. 

Later, Eden privately remarked to Churchill, "Considering 
what has been happening to us under their eyes in the Aegean, 
the Turks can hardly be blamed for their caution." 

What Eden did not know is that the Turkish delegation had 
better reasons for being negative to his proposals. They were 
locked up in Reichsmark diplomacy, and members of the dele- 
gation did not want this golden thread broken. 

Germany was having a field day in Turkey. German assets 
totaled about S30 million and the Turkish-German clearing 
account was $15.7 million, yet neither figure tells the true story 
of German assets in Turkey at that time. Two German bank 
branches, the Deutsche Bank in Istanbul and the Deutsche 
Orient Bank (a Dresdner bank), were depositories for a steady 
flow of bonds, cash, gold, bank deposits, and foreign exchange 
belonging to German firms and individuals. Six German insur- 
ance companies with branches in Turkey followed a standard 
policy of linking Turkish insurance companies into their own 
operation with grants of German investment capital, which 
automatically forced these firms to bow to German policy. But 
it also generated large fluid assets, which were invested in local 
real estate and other properties and business ventures. More than 
sixty German-controlled firms in Turkey were engaged in build- 
ing and public works contracting; building materials and to- 
bacco merchandising; importing and exporting; chemicals and 
pharmaceuticals; shipping, forwarding, and transportation; ma- 
chinery and electrical equipment; and as commission agents. 
I.G. Farben, Krupp, and Bayer were each represented. 

Then there was a 100-million Reichsmark order for German 
war materials to Turkey. While the Eden conference was taking 
place in Cairo, Turkish and German businessmen and govern- 



83 



ment leaders were discussing this contract by a consortium of 
German firms. By terms of this sale, bonds of the Turkish 
Treasury to the amount of RM 100 million were deposited with 
the Deutsche Bank, to be redeemed in half-yearly installments 
from 1944 to 1949 in return for Deutsche Bank credits. 

Deutsche Bank was handling all the financial aspects of the 
Turkish order. This bank computed the sums each German firm 
was to receive in cash, and then formed a syndicate of several 
banks for the funding, with the German firms receiving their 
money immediately. To the German O.K.W., an important 
element of this transaction was the resumption of chromium 
ore shipments from Turkey to Germany. The Turks received 
their war materiel from Germany with promptness, but were 
able to pay only two installments on their war bonds, those due 
May 15 and November 15, 1945. In August 1944 Turkey had 
reluctantly cut its diplomatic and economic relations with Ger- 
many. On February 23, 1945, four months before the German 
surrender at Rheims, France (on May 7 ) , Turkey declared war 
on the Axis. 

In another neutral nation, Spain, Reichsmark diplomacy 
worked equally well. Although Franco sympathized with Hitler 
and his war against communist Russia, even to the extent of 
sending a volunteer division to the Eastern Front, he became 
more neutral as the war went on. In 1943 he had been told 
during a personal meeting with his old friend, Admiral Canaris, 
that Spain should stay out of the war; that Hitler could not win. 
From this moment on he became more even-handed in his 
treatment of German and British diplomatic representatives 
who were quietly fighting for his attention and for the other 
perks that go with a most-favored-nation relationship. 

On the industrial front, however, Germany was winning hands 
down. Almost all sections of the Spanish chemical and pharm- 
aceutical industry came under the control of I.G. Farbenindus- 
trie. It controlled many Spanish firms directly or through 
Unicolor SA. I.G. Farben owned 51 percent of the stock in 
Sociedad Electro-Quimica de Flix, whose manufacturing proc- 
esses were under license from I.G. Quimica Commercial y 
Farmaceutica SA. was a subsidiary of I.G. Farben and dis- 
tributed the Bayer line of medical products in Spain. Farben 



84 



Unicolor SA. represented 16 German firms having interlocking 
directorates with several large Spanish chemical companies. 

There were Lipperheide and Guzman SA. (later to be re- 
named Industrias Reunida Minero Metalurgicas S.A.), whose 
holdings included smelters and transportation facilities. There 
were also in Spain two prominent German-owned banks. 

The Spanish Civil War had given Germany a strong foothold 
in Spain. Hitler had sent technical aid, a Condor division, and 
dive bombers to Franco. The war also enabled his new genera- 
tion of army strategists to test new field and air tactics and 
weapons. In return, General Franco later sent his Blue Division 
to Russia, but by German accounts this did not square the 
Spanish debt. 

In November 1943, an agreement was reached in which Spain 
acknowledged a $1 billion debt to Germany. Several payments 
were made, in free credits. One payment was of $60 million to 
be used by the Germans to buy Spanish property, finance goods, 
and sustain the German diplomatic staff in Spain. In July 1944 
the balance due had been brought down to S40 million by 
Spain. By April 1945 Spain's debt was only $22 million, and it 
was being negotiated by German interests. 

German economic penetration of Portugal was limited. In 
1944 prewar investments in mining gave way to the purchase 
of properties in the cities of Portugal. I.G. Farben did not man- 
ufacture in Portugal, merely marketing pharmaceutical special- 
ties through their Bayer Ltda., in Lisbon and Oporto. The most 
important German manufacturer in Portugal was the electrical 
firm of Siemens Companhia de Electricidad S.A.R.L., a division 
of the Siemens group of Germany. No German banks were 
established in Portugal. 

In their efforts to harness the economies of Europe, admin- 
istrators of the Four- Year Plan encountered resistance "to the 
proposed takeover of certain companies, such as the German 
branch of the Ford Motor Company. The management of 
"Ford-Werke A.G." wanted to hold this company together as a 
profit-making entity ("The war won't last forever and we have 
a good thing in Ford"). They believed that once government 
bureaucracy laid its hand on their corporation it would never 
be the same. Therefore, Dr. H.T. Albert, chairman of the board, 



85 



sent a memorandum to the Four- Year Plan administrators from 
R.H. Schmidt, president of the board of Ford-Werke A.G. 
They mustered the arguments on whether a complete German- 
ization of Ford would be necessary or advisable. In part, Schmidt 
wrote: 

All vehicles and parts are being produced in Germany by German 
workers using German materials; export into the European and 
overseas sales territory of the United States and Great Britain has 
amounted to many millions in the last year of peace. 

Foreign raw materials were obtained through the American com- 
pany (rubber, nonferrous metals) to cover production needs of the 
German plant and in part for the whole industry. 

As soon as the American stock majority in Ford-Werke A.G. is 
eliminated each Ford company in every country will fight for its 
individual existence. Amsterdam, Antwerp, Paris, Budapest, Bu- 
charest, Copenhagen, etc. are concerned (about a collapse of the 
general Ford organization in Europe). 

A majority, even if it is only a small one, of the Americans is 
essential for the actually free-transmittal of the newest American 
models as well as for the insight into the American production and 
sales methods. Since Americans are without a doubt particularly 
progressive in this field, the maintenance of this connection is in 
the German interest. Through license fees or contractual stipulations 
this advantage, as well as the importance of the company for the 
obtaining of raw materials and exports, would be lost. The plant 
would practically only be worth its own machine capacity. 

The memorandum was dated November 25, 1941, and the 
United States went to war two weeks later. While Mr. Schmidt's 
and Dr. Albert's argument became moot, the German govern- 
ment did not break up the Ford operation of Europe. They 
admired its efficiency, placing the various motor companies in 
different countries into their armament production scheme. 

At the apex of this vast financial and economic administra- 
tive structure was positioned Reichsleiter Martin Bormann. He 
had retained his grip on the pulse of German finance ever since 
the day he took charge of the finances of the Fuehrer, and the 
vast funds of the Reich chancellery. His friendship and association 
with Dr. Herman Josef Abs predated Abs's move into the man- 
agement of Deutsche Bank. Dr. Abs had been a partner in the 



86 



prestigious private bank of Delbruck Schickler & Co. in Berlin. 
Recalling those days, Abs has written: 

The Reich Chancellery in Berlin was its largest account, and it was 
through this account that Adolf Hitler received his salary as Chan- 
cellor of the Reich. 

Martin Bormann, whose control of the Reich chancellery was 
absolute the moment he succeeded Rudolf Hess, maintained a 
cordial relationship with the Berlin banker. Dr. Abs moved to 
the Deutsche Bank on December 30, 1937, where he became 
first a member of the board of management, later the chairman 
of the most powerful bank in Germany, which was to tug the 
German financial apparatus ever forward into new areas of 
financial expansion and power throughout the world. 

Reichsleiter Bormann knew that his relationship with Abs 
would tighten as his own power grew. Remaining on friendly 
terms with the Third Reich's leading banker was a contentment. 
He knew in 1943 that with his Nazi banking committee well 
established, he had the means to ultimately take the reins of 
finance unto himself. Through this committee and through the 
power that flowed from Hitler to himself, he could set a new 
Nazi state policy, when the time was ripe for the general trans- 
fer of capital, gold, stocks, and bearer bonds to safety in neutral 
nations. 

Bormann, like Hitler, had no illusions that victory would be 
theirs on the field of battle. Hitler had settled in his own mind 
that a sort of victory might accrue to Germany only with a 
compromise peace with the adversaries. To Martin Bormann, 
he had commented at Obersalzberg in 1943, "No one will make 
peace with us now." Yet he went on nurturing the hope of 
establishing a holding line near Kursk in the Ukraine, then 
fighting the British and the Americans to a standstill in the 
West. 

In the summer of 1943 Hitler requested Bormann to call a 
meeting of his SS security chiefs. Present were Hitler, Bormann, 
Himmler, Heinrich Mueller of the Gestapo, and Schellenberg, 
head of SS foreign intelligence. Foreign Minister Ribbentrop 
also sat in on the conference because his ministry was to supply 



87 



essential data in the game plan now being devised. It was a 
new, cagy diplomacy, in which negotiations were to be opened 
with the West, while simultaneously establishing contact with 
Moscow. 

It was decided at the conference that Himmler should make 
the approach to the West, while Mueller would begin a "Funk- 
spiel," a radio game using captured communist wireless opera- 
tors to send messages to the intelligence gathering center in 
Moscow. This center, so-called, controlled all Soviet agent ac- 
tivities outside Russia. It was the net that pulled in all com- 
munications, which were then distributed to the various 
intelligence chiefs in Moscow, according to priority and need. 
Anything dealing with shifting strategy in Berlin, London, and 
Washington went directly to Stalin. Mueller was very good at 
forcing captured "enemy" wireless operators to work for the 
Germans, using their transmitters, codes, and personnel to cause 
London or Moscow to believe it was their own agent on the air 
still transmitting valid information. 

At the time of this 1943 conference with the Fuehrer, the 
Abwehr had control of Leopold Trepper, a Polish Jew who had 
run a brilliant network for the communists. It had earned the 
nickname "Red Orchestra," because its wireless operators in 
Berlin, Amsterdam, Brussels, and Paris appeared to transmit 
like an orchestra as they followed one after the other each night 
with their messages to the center in Moscow. It took the Abwehr 
and the Gestapo two years to demolish the Red Orchestra. 
Then they learned that all participants were militant Jews dedi- 
cated alike to communism and the concomitant defeat of 
Nazism; thus, to the Nazis it was yet another threat to contend 
with. By the end of 1943 the Gestapo had entrapped more than 
130 communist agents, most of them workers for the Red 
Orchestra. 

The Abwehr arrested Leopold Trepper, the leader, in Paris. 
Shortly thereafter he was placed under the control of the G es- 
tapo, and rather than die he agreed to cooperate by transmitting 
coded messages to the center in Moscow, material that had been 
prepared by the Bormann-Mueller team in Berlin. This latter 
was about to launch "Operation Bear," under Hitler's direction, 
a campaign of sly and false information they believed just might 
split the Allies and lead into a separate peace with Russia. 



88 



Trepper was transported from prison to a large and com- 
fortable house in Neuilly, at the corner of the Boulevard Victor 
Hugo and the rue de Rouvray. Well guarded, from this location 
Trepper sent messages to Moscow, the Red Orchestra had be- 
come the Brown Orchestra. But Trepper's hope was that some 
way along the line he could inform Moscow that he had been 
captured, that his network had been rolled up, and that he was 
transmitting under duress. Such an opportunity did come after 
some months when he smuggled out a coded account of his 
situation, which reached the Soviet Embassy in London and was 
passed along to Moscow. Until that time, however, the center 
was receiving streams of misinformation, from six transmitters, 
in five countries, all run by Mueller's Gestapo, in addition to the 
Trepper one in Paris. One of the more accomplished Red 
Orchestra members, who had succumbed to working for Mueller 
under dire threats to his person, was Johann Wenzel, an expert 
the center had shifted from Holland to Brussels to coordinate 
air traffic of the Belgian network. Wenzel stayed on the air for 
six months, only to be betrayed under duress by Sophie Paz- 
nanska, a cipher expert promoted to station chief in Brussels 
who had been seized by the Germans. Wenzel, who knew the 
new codes in use by the center, returned to the air waves, now 
for the Germans, unsuspected by the staf f of the center. In 
January 1943 Wenzel, while transmitting, leaped up suddenly, 
knocked his guard unconscious, and fled. Reaching the Nether- 
lands, and using a transmitter the Gestapo had not found, he 
sent a full disclosure of Mueller's radio game. It was evidently 
neither grasped nor comprehended in Moscow, for in his mem- 
oirs of 1977 Leopold Trepper stated: "Judging by his answers 
the Director suspected nothing.', 

By this time, Heinrich Mueller had dispatched an assistant 
to Paris to handle Trepper and, in general, the transmission of 
information to the Russian leadership. Heinz Pannwitz was the 
individual, a Hauptsturmfuehrer SS, who had served as aide to 
Heydrich in Prague when the German SS leader was gunned 
down by Czech agents from London. In angry retaliation for 
this, Pannwitz had ordered the execution of thousands of 
Czechs and the burning of Lidice, becoming known to history 
as the "butcher of Prague." In Paris he was determined to make 
a name for himself, and he did so in a predictable, unsavory 



89 



way. But during a full-scale propaganda of fensive by means of 
the Paris Red Orchestra unit, Leopold Trepper had escaped 
and remained underground until the liberation of the French 
capital in August 1944. He was to return to Moscow the fol- 
lowing year, but his misfortunes there are another story — 
he was incarcerated ten years in Lubyanka prison waiting for 
his loyalty to the Soviet Union to be investigated. Following 
the death of Stalin, he was cleared and returned with his famil y 
to Warsaw. Captain Heinz Pannwitz had made his way to 
Moscow believing he could get better treatment from the Rus- 
sians than from the English. He was also imprisoned for ten 
years, then released. In 1977 he was managing director of a bank 
in Ludwigsburg, in West Germany. 

Back in 1943 at the start of Operation Bear, with a peace 
approach to both sides agreed upon at the above-mentioned 
conference, Himmler and Mueller locked horns. Himmler was 
SS chief and minister of the interior, Mueller was SS Oberst- 
gruppenfuehrer and Generaloberst der Waf fen SS — that is, SS 
chief group leader and highest general of the SS force. They 
disliked each other intensely. Himmler had been in chicken 
farming before the war, Mueller had been inspector of detectives 
on the Munich police force and had been taken into the Ges- 
tapo by Heydrich, who needed a core of professionals to make 
the German Secret State Police more efficient. Their open 
hostility to each other made Hitler angry too, and he had 
ordered Bormann to be not only an arbitrator between Him- 
mler and Mueller but to be personally in charge of the wireless 
game deceiving Moscow. This was fine with Mueller, who had 
cultivated Bormann ever since the day the Reichsleiter had 
succeeded Rudolf Hess. He perceived that this was a leader who 
knew what he was doing, and who would go far. 

Things developed, two against one. Bormann didn't like 
Himmler either, and together they ultimately cut Himmler 
down to size. Bormann and Mueller began transmitting high- 
level information to the center in Moscow through their 
"turned" wireless operators. Mixed in with the valid data was 
information on Churchill and Roosevelt picked up from their 
transatlantic conversations, purportedly stolen by communist 
agents from German government files. Out of context, as they 



90 



were, some of the remarks could be, and were, misinterpreted 
by Stalin. 

Himmler made his peace approaches to the West through 
emissaries he sent to Stockholm and Berne, confirmed by Soviet 
agents in these cities. Himmler's men carried documents, falsely 
drawn to show Stalin's eagerness for a separate peace pact with 
Hitler. Himmler had a long talk with one German resistance 
leader about the desirability of peace with the West, and dis- 
cussed how this could be accomplished. He knew the news 
would travel swiftly to London because, if nothing else, German 
resistance leaders were a talkative, hopeful lot. But the fellow 
sent to Berne almost brought about Himmler's undoing. He 
carried a suitcase filled with undeniably authentic documents 
provided by Ribbentrop's Foreign Ministry. The man, Herr 
Langbehn, went first to the British Legation in Berne and asked 
to see the British military attache. He explained he was an 
official of the German Foreign Ministry and had brought with 
him from Berlin a suitcase of Foreign Ministry documents. On 
hearing this claim, the attache presumed it false, and told him 
he was not interested. The German then tried to see the head 
of the chancellery in the British Embassy, but was rebuf fed 
there. So he went to the American Legation and repeated his 
story. A Legation secretary, deciding this was cloak-and-dagger 
material, sent him on to Allen Dulles, head of the OSS in 
Switzerland. He heard out the German's story, viewed the 
documents, realized they were genuine, and reported them to 
Washington immediately. "If only," his message went, "you 
could see these documents in all their pristine freshness." 

The documents were duly copied and sent to Washington 
with Dulles's opinion appended that all evidence pointed to 
their being a genuine approach by the Germans for a peace 
with the United States and Britain. Copies were also sent to the 
OSS in London, which made them available to British intelli- 
gence. At this point Kim Philby, the British traitor who later 
fled to Russia after serving it for thirty years, took charge of the 
documents and of the Dulles memorandum, and reported their 
contents and the German peace feeler to his control in Moscow. 

Moscow received an additional confirming report from their 
man in William Donovan's OSS headquarters. This communist 



91 



agent was a chief of the desk staf f in the Washington office, 
and his position gave him access to all incoming reports of OSS 
station chiefs around the world, including those of Colonel 
David Bruce in London, chief of the OSS in Europe. It also 
explained why many of Allen Dulles's most secret memoranda 
were blocked on receipt in Washington, never to reach the 
commander in chief, the president. After the war, I visited 
Donovan in his Wall Street law office; he confirmed the story 
and remarked sadly, "It was all too true." 

Himmler, however, made a couple of mistakes. One was his 
rendezvous with a German resistance leader, which was ob- 
served by two of Mueller's men. Another was sending an emis- 
sary to Switzerland, whose information was too good and too 
secret — and the man had opened up too much with Allen Dulles. 
Later, a message from a British agent in Switzerland to London 
carried by a man who had talked to Dulles, was intercepted by 
Mueller, who showed it to Bormann, who in turn passed it on 
to Hitler, who hit the ceiling over such detailed revelations. 
Himmler survived this only by arresting his own emissary to 
Berne, and cutting off all further overtures to the West. Every- 
thing was now in Bormann's hands, and he preferred dealing 
with Stalin at this point in history. He thought that with Ger- 
man armies pressing hard a better peace accommodation could 
be made with Russia than with Britain or the United States. 

Peace was not to come to Europe through these initiatives 
in the summer and fall of 1945. Many strategies of deception of 
both Churchill and Hitler failed, but the suspicions fostered by 
Martin Bormann lingered. At the Teheran Conference, Stalin 
was plainly distrustful of the British prime minister. Two years 
had passed since Rudolf Hess's adventure to Scotland to arrange 
a cessation of hostilities between Britain and Germany, and this 
episode rankled the Russian leader, whose suspicion and anger 
were reinforced now by this other information from the center 
in Moscow. He questioned and needled Churchill repeatedly 
about the purpose of Hess's flight. Finally, Churchill replied 
heatedly that he was not accustomed to having his word chal- 
lenged. "When I make a statement I expect it to be accepted 
as fact," he retorted to Stalin. The Soviet deflected this with a 



92 



sly response: "But even my intelligence services don't tell me 
everything." 

At Teheran, President Roosevelt tried for Stalin's approval 
of his statement made at the Casablanca Conference with 
Churchill, in which he called for the unconditional surrender 
of the German nation. At the time, this took Churchill by sur- 
prise, as it did the president's generals. The president told his 
aide, Harry Hopkins, "Of course, it's just the thing for the 
Russians. They couldn't want anything better. Unconditional 
surrender. Uncle Joe might have made it up himself." These 
remarks, seemingly of fhand, had been decided upon earlier in 
Washington, following a meeting with one of the president's 
closest advisors, Supreme Court Justice Felix Frankfurter, of 
whom it was written by Jay Pierrepont Mof fet of the State D e- 
partment, "The power behind the throne was Felix Frank- 
furter." He wanted the German nation punished absolutely and 
totally, and told the president he should insist on "unconditional 
surrender." Henry Morgenthau, another advisor, had urged the 
president to "turn Germany in a howling wilderness." President 
Roosevelt accepted Frankfurter's proposal, but rejected that of 
Morgenthau. 

But at Teheran, Stalin disapproved of Roosevelt's uncondi- 
tional surrender position. He was not impressed with such super- 
fluity; it would only prolong the war, and Russia had suf fered 
in actuality more than the other nations. He commented, "This 
war is being fought with British brains, American brawn, and 
Russian blood." 

After the Teheran Conference, early in 1944, Hitler termi- 
nated his wireless game with the Moscow center, and Operation 
Bear was shut down. An official in the Foreign Ministry in 
Berlin, who had been involved in the operation, said: "Either 
Hitler did not want to turn the radio game into a diplomatic 
reality, or he was not capable of doing so. And there was no 
Talleyrand in Berlin to take the matter in hand," he added 
sadly. 

However, Hitler considered substantial the gains from Opera- 
tion Bear. He had, thanks to it, planted divisive distrust among 
the Big Three. Because of it, too, he hoped they would go ahead 
with an invasion of Normandy, which Hitler was confident 



93 



would be disastrous for the Allies in general and the political 
ruin of President Roosevelt and Prime Minister Churchill. Then 
he would make peace with Stalin, whose nation had been bled 
white; with 20 million dead, and a failed invasion of France by 
the United States and Britain, the upshot would be a peace 
conference between Hitler and Stalin. 

Later, in Washington, President Roosevelt recalled that the 
sole agreement at Teheran was that each principal would move 
forward as quickly as possible. FDR had informed Stalin that he 
could not at the time make long-range agreements for his 
country because he faced an election. "Overlord," the code 
name for the invasion of Normandy, was to be made operational 
in May or June of 1944, and the Big Three prepared to return 
to their respective capitals. Sir Alec Cadogan, Britain's Perma- 
nent Under Secretary for Foreign Af fairs, noted in his diary: 
"The Great Men don't know what they are talking about ..." 
Still, they all knew June of 1944 would determine the future of 
the war, not to mention the future of each leader. FDR yearned 
for Overlord. Failure to launch a Second Front could mean 
defeat for him in the November national elections, at least 
Hitler thus wryly observed to Martin Bormann. Ninety percent 
of America's war ef fort was going to Europe, but there was 
widespread and influential sentiment for a shift in emphasis 
toward winning the struggle in the Pacific. After all, the Japa- 
nese had actually and without provocation attacked the United 
States at Pearl Harbor, said these advocates, and this made it 
more America's war, rather than the situation in Europe. 

Roosevelt was fighting a rearguard action against this move- 
ment. A Second Front was vital to his plans of first defeating 
Germany before taking on Japan with full-scale intensity. He 
was also increasingly handicapped by a whispered belief that he 
had failed to alert the personnel at Pearl Harbor in time to pre- 
vent the catastrophe. After all, U.S. Army Signal Corps cipher 
experts had broken the Japanese diplomatic and military codes; 
the imminence of the attack was known in the White House a 
full two weeks before it happened. Roosevelt's detractors ac- 
cused him of deliberately sidetracking this information until it 
was too late for the defense command in Hawaii to take protec- 
tive action. If indeed true, and all evidence now available indi- 
cates it is, it was the same High Command philosophy that 



94 



propelled Prime Minister Churchill into approving the British 
raid on Dieppe, in August 1942, a disaster that served to show 
the American General Staf f that it was not quite time for an 
invasion of France. At the time, Churchill explained, "My gen- 
eral impression is that the results fully justified the heavy cost." 
(Of the Canadian 2nd division which took part in the Dieppe 
raid, 18 percent of five thousand men lost their lives and nearly 
two thousand more men were taken prisoner.) Sir Alan Brooke, 
chief of the Imperial General Staff, added: "It is a lesson to the 
people who are clamouring for the invasion of France." 

So it was that in June 1944, as an outcome of the Teheran 
Conference, there was set up one of the awesome military 
gambles of history. On its outcome rested, among other things, 
the personal future of the leaders who had guided the war but 
who now regarded each other's motives with intractable sus- 
picion. Operation Bear had worked. 

The people in the occupied nations had meanwhile settled 
into the mold imposed on them by the German army and the 
economic experts of the Third Reich. Their banks and industries 
and agriculture had been brought into Bormann's Four- Year 
Plan, for greater efficiency and prosperity. All nations on the 
Continent, whether occupied or neutral, now looked to Ger- 
many for economic leadership, as they were to resume doing in 
the years following World War II, when the Common Market 
was formed by consenting nations acknowledging that unity of 
purpose is the key to coprosperity and that somehow the Ger- 
mans had the answer originally in 1942 when they were melding 
the economic institutions of the Continent into their own 
design. 



95 




Bormann and Hitler at Hitler's mountaintop country house near Berchtesgaden. 




Eva Braun when she was secretary to 
Heinrich Hoffman, Hitler's personal 
photographer. 



A party celebrating Hitler's birthday on April 20, 1938, at 
Berchtesgaden. In the front row to the right of Hitler and 
Eva Braun are Herr and Frau Martin Bormann. Third 
from the left in the second row of the picture is Albert 
Speer, later ot become Minister for Armaments and War 
Production. (Rudolf Hess, nominally Bormann's chief at 
the time the picture was taken, is not even in the group, 
an indication of his declining fortunes even in 1938.) 




taken by the author 



the night Rudolf Hess parachuted into Scotland, May 10, 1941. 



..H •' ,,, «' 



• f 8 




Nazi Reich State Security Bureau (Gestapo) SS General 
Heinrich Mueller, wearing SS uniform and decorated 
with the highest civil medal for war service. 



Purported grave of General Heinrich Mueller in Berlin. 
The headstone reads "Our Dear Daddy," Mueller's 
name, and his dates from birth to alleged death in 1945. 
When exhumed by court order in 1963, the grave held 
three skeletons, none with Mueller's short stature and 
high forehead. 




Fritz Thyssen, the Ruhr industrialist and early financial supporter of Hitler. 
The picture was taken in Germany by Thyssen's young grandson, Federico, 
prior to the flight of the Thyssens to Switzerland in 1939. The grandson is 
now Count Federico Zichy-Thyssen of Buenos Aires, who controls the 
Thyssen Steel Group of Dusseldorf from the Argentinian capital. 



NINETEEN FORTY-THREE ALSO MARKED AN EMO- 
tional plateau for the people of London. The war was going 
better in the Mediterranean, and the reassuring buildup of forces 
in England could be seen on every side. But after three years 
of putting out, a lassitude set in. Food and liquor were in short 
supply. In neither Britain nor Germany was there a black mar- 
ket of any consequence; the inborn rectitude of both peoples 
made for compliance with rationing regulations — that is, until 
the war ended, when, in Germany for a time, the black market 
was for survival. But in France, Belgium, Luxembourg, Holland, 
even in Warsaw, the black market flourished under the direction 
of the cynical and self-serving, catering to those to whom luxur y 
in general and good food in particular became the touchstone 
to bearing the whole thing. This spirit was reflected by Paul 
Reynaud, premier of the French government that presided at 
the fall of France to the Nazis. He had fled in 1940 to Bordeaux 
with his cabinet, which was in fact dominated by his mistress, 
Helen de Portes. Winston Churchill asked Reynaud to proceed 
to Algiers to set up a new resistance government; he refused to 
do it. During this period, Reynaud's physician asked the premier 
for help in getting passage to England. Reynaud brushed him 
off with: "Why bother? In two weeks England will have given 
up. Stay and have lunch — Helen's marvelous — despite everything 



99 



she's managed to persuade the chef to make a chocolate souf fie 
for you." 

In England there were inequities. Some of the rich, but not 
in general the old families, the aristocracy, had skipped out of 
London and were living in fine style at Torquay, on the south- 
east coast, where elegant hotels overlooked the very beautiful 
yacht basin. Along the upper Thames, it was not uncommon to 
see women in satin and chif fon and men in black tie stepping 
from limousines into hotels for a weekend of luxurious living, 
with money no object. 

From Brussels and Paris, those who could still af ford it went 
for summer vacations to the mountains or seashore. If you 
knew the angles and had the wherewithal, food always was 
available in wartime Europe. At the infamous market Sennaya 
in Leningrad, fresh chopped human flesh was sold in the terrible 
winter months of the siege during 1941-42. The Germans, due 
to the efficiency of their own rationing system, had sufficient and 
well-distributed supplies until the end of the war, at which point 
everything broke down, understandably. This factor, more than 
the importation of food from occupied countries, accounted for 
the higher nutritional level of the Germans. In Paris the Ger- 
mans let five de luxe restaurants continue serving meat through- 
out the occupation. 

John Lukacs, in The Last European War, writes a melancholy 
description of the Warsaw ghetto and the luxuries obtainable 
there, if one had the price. "Restaurants, cafes, nightclubs (and, 
what is less surprising, brothels) existed, taking in fantastic 
sums." 

How can this be explained, interpreted, rationalized? Such 
behavior took place wherever wealthy refugees, of any national- 
ity or race, congregated-in Cannes or Lisbon, for example. It 
was this writer's observation that such folk lived simply for the 
moment, and that in Warsaw especially life held little future. 

The curfew kept the general population in their dwellings at 
night. Birthrates went up. Under the strictures of limited gaso- 
line, thus much walking and limited food, the average European 
lost fifteen to twenty pounds. Parisians became accustomed to 
bicycles and pedicabs; a pleasant benefit was that air pollution 
was so reduced that the trees along the Champs-Elysees greened 
once again. The typical Londoner had a face pale and drawn, 



100 



not only from the limited nutrition of rationed food but even 
more from the long, unending fact of coping, coping, coping. 
At the Savoy Hotel food went on being served with the usual 
elegance and flair, but the impeccably polished silver salvers 
bore roast pigeon rather than grouse from Scotland as in the 
past. Still, each night the Carroll Gibbons orchestra played, and 
the bar was crowded with Fleet Street journalists and American 
war correspondents; among the habitues, along with myself, 
were such notables as Scotty Reston, Drew Middleton, Ernie 
Pyle, and Ray Daniels. Walter Cronkite was reporting for 
United Press at that time. All of us moved between Fleet Street 
offices where we wrote our stories, the Ministry of Information 
where we received copy clearance, and the American bar of the 
Savoy where we exchanged gossip. I had joined CBS News in 
London, having served as European bureau chief for an Ameri- 
can news service in the British capital, but was then hired by 
Edward R. Murrow to help cover the war in Europe. Piccadilly 
Circus and Leicester Square were close by, and they were the 
route of many service men and women on leave, making their 
way through the dimly lit, usually foggy, streets to their destina- 
tion of the evening. 

Survival this long was a hard run for the British. There had 
been Coventry, Edinburgh (where fires destroying a distillery 
one night gave the firemen a memorable binge on Scotch whis- 
key), Glasgow, the Midlands, Liverpool, Bristol, Plymouth, and 
the largest and most vulnerable target of them all, London. By 
I their resolute determination not to cave in, Londoners were an 
example of glowing courage to cities elsewhere in Britain, whose 
inhabitants, by extension, felt akin in worth to Londoners, so 
they too held out under extreme battering from the air. By 1943 
the atmosphere of urgency had backed away. Some reminders 
were seen in small towns and villages where RAF fighter pilots 
of the Battle of Britain, and later ex-bomber crews of the air 
counterattack over Germany, underwent plastic surgery. One 
could readily spot these young men; they were shaken and with- 
drawn as they hobbled through old streets or sat in the sun on 
village greens, their characteristic skin grafts as much a badge of 
merit and bravery as their uniforms and Distinguished Flying 
Crosses. 

Writing of these scenes of long ago reminds me of one CBS 



101 



Radio broadcast that Ed Murrow, Alexander Woollcott, and I 
did one evening from around Britain. I, in Scotland, described 
the fright of the bombing of Glasgow and the contrasting tran- 
quility of nearby Loch Lomond, where I talked with a gentle- 
man who had lost his home entirely to the bombing that very 
day, and had thereupon gone fishing in the beautiful Loch. 
Philosophical about the ruinous blitz, he declared to me: "Ma 
family and ma fishing tackle were all safe in the wee Anderson 
shelter." In Plymouth, Alexander Woollcott spoke to wives of 
the seamen who traditionally make up the crews of destroyers 
and escorts and battleships of the British navy. He began his 
broadcast with this: "The loss of a destroyer in the Atlantic is 
only a stick of type in your newspaper tonight. But here in 
Plymouth it means a street of widows." In London, Ed Murrow 
described the condition of the city and the strain of three years 
of war on a courageous people, and postulated what the imme- 
diate future held for him: "Unfortunately, more of the same, 
for war is a process of waiting until it is time to cross the Chan- 
nel into battle." For the British, that eventuality had not ar- 
rived, except for the waters of the North Atlantic and the skies 
over Germany. 

Among the German people, there was lassitude. However, 
Hamburg had been nearly destroyed in the initial massive Brit- 
ish raid of the war, in this year of 1943. Four hundred aircraft 
had dumped high explosives on the city, but the most awful 
devastation took place when oil and gasoline storage tanks went 
up in flames. Fanned by strong winds, it became truly a holo- 
caust. Thousands of human beings attempted to flee to the 
river, but there, too, fire was engulfing the very water from the 
spillover from the oil barges, which, of course, were aflame too. 
Those who managed to hurl themselves into the water perished 
anyway. It has been estimated that the heat reached 1,000 
degrees Fahrenheit that night. In other areas of Germany, even 
in cities not especially hard hit, war strain was on all faces, just 
as in London. Stalingrad fell on February 1, and with it 350,000 
German soldiers either died, were grievously wounded, or were 
taken prisoners of war by Stalin's soldiers, many never to be 
seen or heard from again. Through necessity, Germany was now 
moving into full mobilization. Adolf Hitler himself was af fected 
by the continuous tension. On his doctor's advice, he left his 



102 



field headquarters at Rastenburg on the Eastern Front, on 
March 20, 1943, and returned to his Bavarian chalet at Obersalz- 
berg for three months' vacation, leaving his military to hold the 
Russians at bay until spring. It was from there, Obersalzberg, 
that Reichsleiter Martin Bormann dispatched the workings of 
government. In May, the Fuehrer returned to Rastenburg to 
direct the battles of spring and summer. 

Back at Number 10 Downing Street, Winston Churchill also 
had to have his respite. It was spent at Chequers, the traditional 
country house of the British prime minister, given to the Crown 
back in 1912 by a very rich merchant, and along with it a trust 
fund for its maintenance. Not so with Downing Street itself, the 
upkeep of which was paid for from Churchill's £10,000 annual 
salary as prime minister, which placed him in a high tax bracket 
that left him very little to live on. In fact, it was not until there 
was later published Churchill's monumental six-volume series 
on World War II ("to get my story on the record first," he 
said), that he acquired the means to live out his life in serenity. 
Lord Beaverbrook, the late newspaper tycoon, handled world- 
wide sales of the books, which amounted to millions, but, alas, 
that too fell in the high brackets. But Beaverbrook had the wis- 
dom to establish the Churchill Foundation, which helped out 
with taxes. Churchill told me once that in the 1930s, when he 
was politically in the wilderness, it had been touch and go finan- 
cially He depended on his income as a professional writer, he 
did a weekly series on general European affairs, with this byline: 
"By the Rt. Hon. Winston S. Churchill." "It was a hand-to- 
mouth existence, and not pleasurable," he remarked. But in his 
own modest country house in Westerham, Kent, where he him- 
self laid the bricks around the boundaries of his land, the Sun- 
day dinner table was always graced with a roast of beef. His dear 
wife Clementine said of those days, "It was his pride and 
wish to have a nice table at least once a week for the family." 

Pride of the same sort motivated Charles de Gaulle, in the 
years after his retirement from leadership of France, to go on 
setting a bountiful table, despite the cost. He had refused a 
grant of money from the French government, and lived on his 
soldier's pension in his unassuming country home. The day came 
when Mme. de Gaulle had to sell a valuable table centerpiece to 
pay for the dinner that her husband insisted on the following 



103 



Sunday. Considering the reality of his financial situation, he 
applied for a loan from the Rothschild bank in Paris. The bank 
manager then was Georges Pompidou, and he gladly granted the 
loan to de Gaulle. Only in Germany was the national leader 
spared personal financial worries; there Adolf Hitler had in 
Martin Bormann a man who could anticipate and take charge 
of all fiscal affairs for both the party and the Fuehrer. 

Churchill's schedule seldom varied in this wartime year of 
1943. The vulnerability of Number 10 Downing Street to enemy 
bomb hits prevented him from sleeping there. He went there in 
the early morning, and in a ground-floor bedroom got into a 
pair of pajamas and climbed into a large, old-fashioned ma- 
hogany bed facing a window from which he viewed a grassy 
area back of the house. Then he read. First were the of ficial 
overnight papers, then general mail, reports from the Mediter- 
ranean, the Balkans, the Atlantic. At 8:30 he would ring for his 
breakfast. Then one of his six secretaries would enter to take 
dictation on a noiseless portable typewriter. In this manner all 
his books were written, both before and after the war. Around 
10:00 A.M., the secretary elsewhere processing the work, Chur- 
chill would bathe, dress, and proceed to the large, log-heated 
conference room in the adjoining wing, for a cabinet meeting. 
He would listen as each minister in turn reported and answered 
the many questions Churchill posed. A round-table discussion 
would follow, and the conference would be over. Lunch would 
likely be in the company of key men of the Admiralty and the 
War Office, who had merely to cross the street to enter Number 
10. An hour nap after lunch, the prime minister would then 
walk to 2 Great George Street near Storey's Gate, passing a 
sandbagged guardpost at the entrance, and descending to be- 
neath the pavements of Westminster to his command post. 
While there was a certain quietude on the London streets in 
1943, there was nothing of the sort in the command post. The 
Battle of the Atlantic was in its most critical phase, and at this 
location the British naval of ficers would discuss with Churchill 
the moves that would counter those being made by Grand 
Admiral Doenitz at his U-boat Command Headquarters in 
Berlin. 

Admiral Doenitz began 1943 with the greatest number of 
submarines he had ever had at his disposal, 400; it was a formi- 



104 



dable increase over the 57 he had started with in 1939. January 
was a month of severe storms in the Atlantic. This weather 
factor worked against the submarines, but still they managed to 
account for 37 ships totaling 203,000 tons. In February they in- 
creased British sinking to 63 ships, 360,000 tons. In March the 
number of sinkings rose even higher, and the prime minister 
was gravely worried. How, he queried, could U-boats with a 
below-surface speed slower than that of any convoy manage to 
intercept so many convoys? For a submerged U-boat to attack 
a merchant ship it needed a good sighting position, preferably 
on the bow, and a fast convoy zigzagging didn't provide that 
much of a target. "Yet the Germans are getting through and 
doing severe damage to our supply ships from America . . . the 
answer is either luck or good intelligence," Churchill remarked. 
It turned out to be good intelligence. Doenitz had his sub- 
marines attacking as wolf packs, no longer singly, and Allied 
merchant convoys were harried from all sides. The German 
admiral went on record: "The German B-service, our crypto- 
graphic section, time and again succeeded in breaking enemy 
ciphers. As a result, U-boat Command received not only the 
British signals and routing instructions sent to convoys, but also 
in January and February, 1943, the British U-boat Situation 
Report, which was transmitted to Commanders of convoys at 
sea and which gave the known and presumed distribution of 
U-boats in different areas." 

With this information the submarines could change their 
positions quickly and then regroup to meet a convoy head on. 
The British and American naval commands, unbeknownst to 
Doenitz, could also intercept these German cipher signals with 
their highly secret "Ultra" code breaker system. 

The edge held by the German side was demonstrated in 
March 1943, when two great convoys left Halifax for England. 
Their identities were HX229 and SC122. The B-Dienst crypto- 
grapher unit in Berlin intercepted the sailing message, giving time 
of departure of HX229, a convoy of 40 ships, on March 8. It 
was to anchor in the Mersey, near Liverpool. Doenitz ordered 
a wolf pack to intercept it. Then he learned that another con- 
voy, SC122, of 60 ships, would be departing, and another wolf 
pack was dispatched from its patrol area to an interception point 
off the English coast. British naval intelligence in Whitehall 



105 



picked up these instructions on their Ultra devices, and ordered 
both convoys to change course. But as both neared the western 
approaches to England the vessels had to close ranks. When 
they came into view of the U-boats at night, they presented a 
broad front totaling 106 ships and strung out for miles. Destroy- 
ers and escort vessels tried frantically to cover the vast area from 
attack. The U-boats approached silently underwater, then sur- 
faced amid the convoys. The Germans had 40 U-boats in their 
force, and started their attack on March 16. It was a running 
battle for days, and when it was over one in five of the convoy 
ships, carrying every imaginable item of war from tanks to Spam, 
was sunk. 

"It was as close as we came to total defeat in the Battle of the 
Atlantic," one British naval intelligence of ficer was to observe. 
However, April was to be even worse, with more submarines 
streaming into the North Atlantic and claiming 56 ships of 
330,000 tons before the month was over. 

Prodded by Churchill and by U.S. naval authorities, British 
naval intelligence, which knew now that the enemy was reading 
their naval codes, changed to a fresh and more complicated 
cipher, and started to use newly invented decoding machines 
provided by the U.S. Navy. These changes defied all ef forts of 
the B-Dienst, and for the first time Admiral Doenitz had to 
operate without the information he needed to direct his wolf 
packs. British and American naval escorts grew larger in num- 
ber. Surveillance aircraft, now flying in increased numbers over 
the western approaches to England, were also equipped with 
improved radar for detecting submarines. Combined, these 
benefits contributed to the sinking of 41 U-boats in May, and 
Allied shipping losses were fewer by 200,000 tons. On May 24, 
1943, Admiral Doenitz instructed his U-boats to withdraw for 
a time from the struggle. "I ordered them to proceed, using the 
utmost caution, to the area southwest of the Azores," he later 
recalled. His monthly rate of losses had become untenable; in 
June, July, and August, 72 of his submarines were sunk. He 
attempted an investigation into his cipher system but reached 
the wrong conclusion; headstrong, he was determined it was all 
the fault of traitors. Instead, it was rather the Allied capacity 
to tap his codes, along with the influx of new naval and air 
equipment, that had turned the Battle of the Atlantic against 



106 



Germany. Doenitz knew the only solution for the Nazis now 
was faster submarines, snorkel-equipped, electrically propelled, 
using torpedoes, which could travel without detection by exist- 
ing sonar devices. It was this new generation of U-boat that 
Hitler ordered into full production in 1944. 

The biggest out-in- the- open news story of 1943 in Europe was 
the night-and-day bombing of Germany by the Royal Air Force 
and the United States Eighth Air Force. The Battle of the 
Atlantic could not be told in full, nor could the war of decep- 
tions that had failed for Churchill and Hitler. But commencing 
at almost base zero in the summer of 1942 (when the best the 
U.S. Air Force could do was to launch a symbolic raid on 
France on the Fourth of July with six fighter bombers, three of 
which failed to return), the buildup of American air strength was 
steady. Graceful B-17 Flying Fortresses, suited to the war 
in Europe, along with lumbering Liberators, strategically pref- 
erable for the Mediterranean and the Pacific, were arriving con- 
tinuously and in great numbers. Existing runways were being 
lengthened everywhere to accommodate these aircraft, and 
centuries-old farmland and meadows were being bulldozed into 
new American airfields. England was being transformed into 
one vast aircraft carrier. 

The Casablanca Conference of January 1943 had closed with 
the startling "Unconditional Surrender" utterance by President 
Roosevelt, which ultimately prolonged the war with Germany. 
It also brought to an end the bitter disputations between British 
and American air strategists over the coming use of American 
bombers in England. The British wanted the Americans to 
bomb along with them at night. They had tried daylight bomb- 
ing and their losses had been extreme. But General Hap Arnold 
and General Ira Eaker, commander of the U.S. Eighth Air 
Force, held out for daylight bombing. Faker's memorandum, 
which turned the trick, stated that "around the clock" bombing 
of Germany would destroy German capability to wage war. It 
was a foolish and naive statement, but Arnold and Eaker and 
their commanding general Spaatz got their way. 

American air generals had nurtured a belief that they had in 
use the best bombsight in the world, Norden, which the Ger- 
mans didn't have, and aircraft that, when flying in tight forma- 



107 



tion at high altitude, could hold of f German fighters while 
hitting a pickle barrel from 15,000 feet. It didn't work out like 
that. The Norden sight was good, perhaps the best in the 
European Theatre of Operations at that time. Bombardiers were 
instructed to destroy the Norden bombsights if forced to land 
in enemy territory. But the Germans knew all about the Norden 
sight, and had adapted some of its principles to their own use. 
A Sperry engineer who was also a German agent had sent copies 
of the Norden blueprints in 1940 to his control in Germany. 
He was rewarded with a vacation trip that year to Germany, and 
the first thing that greeted his eyes when he entered his splendid 
hotel suite was an exact replica of the Norden sight, built by 
German engineers from his blueprints. 

As for holding of f the Luftwaf fe over Germany, this didn't 
fare at all well until American bomber strength was so great that 
they were sending aircraft in division strength with long-range 
fighter squadrons for protection. Even then, with close-forma- 
tion flying and Browning machine guns from several hundred 
B-17s laying a wall of shells all over the skies to keep of f the 
attacking Messerschmitts, the losses were enormous. In the three 
months before D-Day in June 1944, when American air strength 
was at its peak and the Luftwaf fe at its weakest, according to 
official communiques, the U.S. Eighth Air Force lost nearly 
10,000 airmen, 800 heavy bombers, and over 500 long-range 
fighters. 

In 1943 losses were proportionately greater, and they were felt 
more deeply by those who survived the great air battles of that 
year and by those who planned them. 

The Royal Air Force had its disasters too. British raids on 
Hamburg, Cologne, and Berlin did great damage to civilians, 
but at a high cost in planes and young men. Anthony Cave 
Brown in his book Bodyguard of Lies writes of one raid on 
March 30, 1944, which took a greater toll of the RAF than the 
entire Battle of Britain. The raid itself, according to him, was 
strange; it was designed to get the Luftwaf fe to come up and 
fight, so that in the process their number would be whittled 
down for the D-Day period of attack. He also indicated that it 
was a deception raid. -Brown quotes General Sir Francis de 
Guingand, Montgomery's chief of staff and the 21st Army group 
officer, who ensured that deception conformed to strategy and 



108 



tactics. "On at least one occasion," de Guingand recalled, "the 
deception people were authorized to reveal the target of a major 
air attack on a German city to the Germans beforehand in order 
to reinforce the credibility of an [XX-Committee] agent who 
was to be used to mislead the German high command during 
'Neptune,' which was the code word for the impending invasion 
of France." Brown's supposition is that Nuremberg was such a 
raid. It was a straight in-and-out raid made without deception 
on a clear night, and every German fighter in the defensive zone 
was in the air waiting. In this one night, the RAF lost 108 
aircraft over Germany, 745 crewmen killed or wounded, and 159 
prisoners of war taken; while on the return to airbases in Eng- 
land 53 bombers crashed. It was a one-night disaster, and the 
airmen who clambered exhausted from their aircraft were under- 
standably bitter and suspicious over the planning of the mission. 

It didn't take long for the U.S. Eighth Air Force to get 
bloodied, as some hard-nosed amateurs observed in 1943. There 
was not an American airbase in England that did not have its 
losses following an air raid. The concrete U-boat pens at Saint- 
Nazaire and other French coastal targets were the milk runs. 
But Germany was the hornets' nest, and each bombing venture 
was one of brave men on both sides doing deadly battle, the 
Eighth Air Force versus the Luftwaf fe. The deeper the pene- 
tration and the more strategic the target, the higher the losses — 
an automatic equation. Ira Eaker was pushing his men and 
bombers with the faith that it was the decisive effort that would 
shorten the war. He can hardly be faulted for this viewpoint, 
when both Franklin Roosevelt and Winston Churchill held the 
same. Churchill in July 1941 had told Roosevelt about his in- 
tention of pounding Germany and Italy ceaselessly. "These 
measures may themselves produce an internal convulsion or 
collapse." To be sure, this statement may have merely been his 
way of encouraging the president to believe a full-scale invasion 
of the Continent with Allied armies would not be necessary to 
defeat Hitler. In months past his battle cry to ensure Lend- 
Lease aid had been, "Give us the arms and we will do the rest." 

The only convulsion the bombing was to produce was on 
British and American bomber bases in England. In 1943 joint 
air losses had almost reached the unacceptable point. The Ger- 
mans had regeared their defenses against night-and-day air 



109 



attacks. A large proportion of their armament production had 
been shifted to antiaircraft guns of all caliber, their fighters 
were excellent, new radar was in use, and the entire northwest 
region had been formed into box defense zones in which their 
fighter planes moved by zone according to the attack; if the 
Allied raid was a deep penetration inland, the invading air 
fleet would be passed from zone to zone by fighters that would 
always have suf ficient gasoline to remain in the air until the 
bombers passed through their zone to the next German fighter 
squadrons. The bombers ran a gauntlet of fire from the ground 
and attack from the air, continuous and unrelenting, both to 
and from a target. So severe was the strain on the crews that 
an airman who survived 25 missions in 1943 was free to return 
to the United States. 

Early in 1943 a small group of American war correspondents 
volunteered to be trained for flying with the B-17s in their mis- 
sions over Germany. This was intended by the U.S. Eighth Air 
Force to communicate to Americans back in the States the 
eyewitness story of these air battles and the bravery of their 
sons. I was one of these trainees, representing CBS News. There 
were also Walter Cronkite, then of United Press, Gladwin Hill 
of Associated Press and later of the New York Times, Robert 
Post of the New York Times, Homer Bigart of the New York 
Herald Tribune, William Wade of International News Service, 
Sergeant Scott Denton of Yank, and Sergeant Andy Rooney of 
Stars and Stripes. As a jocular takeoff of World War Fs "Fight- 
ing 69th," we were referred to as "the Writing 69th" by Colonel 
Jock Whitney, a peacetime publisher and financier, and Colonel 
Mac Kriendler of 21 Club fame, who were among those of the 
Eighth Air Force who had sold the concept to General Ira 
Eaker. We were sent to gunnery school in England, where we 
learned to identify all German fighter planes and to strip down 
and reassemble within 40 seconds the Browning machine guns 
used in the B-17s and Liberators. This was essential knowledge, 
for seconds saved in fixing the stoppage in a malfunctioning 
machine gun could be the dif ference between life and death. 
We were not flying as excess baggage but as gunners first, war 
reporters second. Over Wilhelmshaven, on our first mission, I 
shot down a Messerschmitt fighter that had come right at us 
from the front where I was acting nose-gunner. On the same 



110 



mission, Bob Post's Liberator came apart in midair from the 
combined flak from the ground and cannon fire from attacking 
German fighters. In his plane, none survived. 

There was a year of such missions. I didn't fly them all, just 
those that had special news interest. I would remain in London 
between missions, interviewing people and gathering news for 
my CBS broadcasts on "The World Today" each morning. But 
I still recall vividly today the bombing run that I made in the 
company of a crew on their 25th mission; come hell or high 
water, they were determined to make it home, back to the 
States. 

We lifted up, of f the airfields of East Anglia, in the early 
morning, 200 B-17s climbing and gathering into close formation 
over the North Sea. At 12,000 feet the crew clipped on oxygen 
masks, fired test bursts from their Brownings, and then headed 
for Germany and the target, which on that day was the harbor 
of Gdynia, Poland. Here the Gneisenau and the Stuttgart, two 
German battleships, 17 U-boats, destroyers, and several smaller 
vessels were at anchor. It was to be a 2,000-mile round-trip flight, 
right across Germany, and as we crossed the coastline at day- 
break the German fighters began picking us up. It was a running 
battle all the way to Gdynia, then "Bombs away," and the 
swing around for a return. Some of the B-17s limped on to 
Switzerland with engine malfunctions; others crossed the Baltic 
for safe haven in Sweden. At 20,000 feet over Poland the sea 
seemed a toy pond, and Sweden beckoned invitingly. Leningrad 
was but 400 miles to the east, but the pilot had home on his 
mind- The formation closed for the self-protection of crossfire 
and we headed for England. Here is a quote from the story I 
wrote on my return, which I broadcast over CBS: 

Across western Germany you could feel the big ship wobbling badly. 
It had taken too much flak, too much cannon fire. The holes in the 
fuselage ripped larger. We couldn't keep up with the other planes 
and our pilot dropped lower with each mile until we were hedge- 
hopping 30 feet off the ground, which kept the fighters from coming 
up from underneath. We passed so low over a German gun emplace- 
ment in Holland I could see the sweat on the backs of the German 
gunners on this sunny day, trying to bring us down. Bill laid one 
burst right down the middle of a pathway leading to a pillbox. His 
shells tore a gunner apart. 



Ill 



We prayed that the gas would hold out. Suddenly it became 
necessary to lighten the load as we began crossing the North Sea. 
The fighters had turned away and then we were skimming low over 
the water. Everything moveable went overboard: machine guns, 
radio, empty shell cases, oxygen tanks. We made it. The captain 
pulled the shattered craft up over English clif fland and skidded the 
length of an RAF runway to a halt. All of us were still for maybe 
four minutes, exhausted and drained. Bill the bombardier sank down 
to the floor of the plane with his head between his arms. The navi- 
gator fumbled abstractedly with his maps, folding and refolding 
them. I just sat, thinking, I'm alive. Five of the crewmen would 
never again have that or any other feeling. They had died on the 
way back, one with his head shot of f. Fourteen hours of hell in 
the air. 

There were to be other missions in which bravery and heroism 
and fear all seemed to blend into a pattern. Lieutenant General 
Carl A. Spaatz, who succeeded Ira Eaker as commander of the 
Eighth Air Force, was prompted to say after the raid on the 
ballbearing factory at Schweinfurt, in which 60 U.S. bombers 
were shot down and another 17 seriously damaged, "We don't 
deserve such men. They know how bad it is but, aside from a 
few, they're ready to go again. We just don't deserve them." 

Perhaps these air contests over Germany in 1943 and 1944 
were worth the expenditure in men and machines. But the 
conclusion of the U.S. Strategic Bombing Survey after the war, 
when they assessed the bomb damage done to Germany, was 
that "prior to mid-1943, neither the British nor the U.S. attacks 
had a significant effect on military output as a whole; that in the 
second half of 1943 and the first half of 1944 they caused losses 
of some five and ten per cent respectively." 

By June of 1944, the British and American air forces were 
dumping 3,000 tons of bombs a day on Germany. Yet German 
military production kept pace with army requirements because 
the bombs were usually aimed at big cities, rather than at precise 
factory targets, which were relatively small and hard to hit. Even 
air defense armaments and production (fighter planes, antiair- 
craft guns) nearly tripled in the first half of 1944. Winston 
Churchill had abandoned the idea of halting German factory 
output through bombing; instead, he hoped to break the will 



112 



of the people by destruction of their cities. But the German 
people, once fully mobilized following shock from the loss of 
their army at Stalingrad and the later destruction to Hamburg, 
Cologne, and Berlin, were able to maintain production capacity 
against air onslaughts for a remarkable length of time. The 
nation excelled in improvising, which should set at rest the 
British- American myth of World War I that Germans cannot 
improvise successfully (like Hollywood's myth of 1940 that 
Japanese pilots couldn't fly as well as American pilots because 
they had slanty eyes). The Germans extemporized in the face 
of enormous dif Acuities; the ability to surmount shortages of 
critical war items and the quick repair of bomb damage to 
maintain production levels were strong points of German in- 
dustry. 

In this same month, German test pilots were flying new jet 
fighter prototypes having double the speed of existing fighters 
and great maneuverability. In quantity, they would have deci- 
mated the slow- flying bombers of the RAF and the U.S. Eighth 
Air Force. Their V-2 rockets, weighing 13 metric tons, were 
hitting London at 1,500 miles an hour, using only regular bomb 
explosives in their nose cones. An atomic warhead was all that 
was needed to change the face of war in Europe, and German 
scientists were straining to produce just that. Germany pos- 
sessed other new weapons, but not in volume production, in the 
summer of 1944. Albert Speer, minister of armaments and 
war production, told of these: 

We possessed a remote-controlled flying bomb, a rocket plane that 
was even faster than the jet plane, a rocket missile that homed in 
on an enemy plane by tracking the heat rays from its motors, and 
a torpedo that reacted to sound and could thus pursue and hit a 
ship fleeing in a zigzag course. The designer Lippisch had jet planes 
on the drawing board that were far in advance of anything so far 
known, based as they were on the all-wing principle. We were liter- 
ally suffering from an excess of projects in development. 

Hitler strove to buy time on the battlefields so that he could 
place at least a few of these new weapons into battle. 

Martin Bormann, on a dif ferent tack, was having meetings 
with Hermann Schmitz, president of I.G. Farben, regarding the 



113 



movement of German capital out of the Third Reich. Schmitz 
was just the right man with whom to hold such discussions. 
Earlier in the war, he had reported to Bormann: "Our measures 
for camouflage have proved to be very good during the war, and 
have even surpassed our expectations in numerous cases." He 
was talking about the concealment of the true ownership of 
Farben assets as a war and postwar device. 

Bormann was well versed in the usual fiscal stunts practiced 
by banks and big corporations. But his association with Her- 
mann Schmitz, the "master of financial camouflage," was tanta- 
mount to matriculating in a confidential postgraduate course in 
highest level corporate and money manipulation. For this rea- 
son, Schmitz was also given the title of "secret councilor" 
( Geheimrat) to the NSDAP and Martin Bormann. He sharp- 
ened Bormann's already sharp skills, which were soon to be 
utilized for the German postwar commercial campaign that the 
Reichsleiter visualized. 

Bormann was comfortable in his relationship with Schmitz 
and I.G. Farben. All Farben company leaders overseas (I.G. 
Verbindungsmanner) were NSDAP members. This made Reichs- 
leiter Bormann, as head of the party chancellery, their political 
chief. In addition, because German economic specialists had 
successfully penetrated eleven nations and had the economies 
of each under control, Bormann had a further base of business 
relationships outside Germany totaling several hundred thou- 
sand: businessmen who felt snug working with German eco- 
nomic leadership because it was always profitable. Under party 
rules, the chain of command ran from Bormann to the minister 
of economics to those who administered the Four-Year Plan 
of German economic supremacy to those businessmen of oc- 
cupied territories and neutral nations who took their directives 
and profits from Berlin. This economic web stretched across 
France, Belgium, Holland, Norway, Yugoslavia, Austria, Poland, 
Spain, Sweden, Switzerland, Turkey, Portugal, Finland, Bul- 
garia, and Romania, and reached out to such South American 
countries as Argentina, among others, that preferred an associa- 
tion with Germany to one with Britain and the United States. 

I.G. Farben by itself was represented in 93 countries. This 
industrial multinational, added to other German corporations 
and the businesses and businessmen of all these countries, gave 



114 



Martin Bormann an economic empire of unparalleled magni- 
tude in which he could operate when it came time to shift Ger- 
man assets elsewhere. The predictable defeat of Germany would 
give pause to this international economic relationship, but it 
would be quickly renewed during the early cold war years and 
their intense friction with Russia. This latter caused General 
Patton to say, "America had been fighting the wrong enemy — 
Germany instead of Russia." For this intemperance, General 
Eisenhower relieved him of command of the U.S. Third Army. 
It was not long after that Eisenhower was telling Konrad Ade- 
nauer that he didn't object to reappointment of deposed Nazis 
if they were the best men for positions in the new German gov- 
ernment. Likewise, another American general (Lieutenant 
General Lucian K. Truscott, Jr.) commented that he would 
like to see soldiers in a new German army like those who had 
fought him at Anzio. 

But Swiss banks and the use of Swiss fiscal agents were spe- 
cifically on the agenda of the June 1944 meeting. Schmitz laid 
it all out for Bormann when he explained how he had disbursed 
I.G. Farben. 

There was an age discrepancy between the two men. In 1914, 
when Bormann was entering Science High School in Halber- 
stadt, Schmitz was an executive of Metallgesellschaft A.G. in 
Frankfurt, at the beginning of an amazing career. A fellow 
executive was a Swiss, Eduard Greutert of Basel. Six years later 
Greutert returned to Basel to open a private bank, Greutert & 
Cie. The funding capital was provided entirely by Metallgesell- 
schaft A.G., and it was Schmitz's idea. It was the start of a great 
flow of German assets to Switzerland in 1920-21 by industrial 
leaders who distrusted their government, which could contain 
neither inflation nor communists. Hermann Schmitz also had 
the idea that a corporate base in Switzerland would be desirable 
to offset the bad German image after World War I. Germany 
went on suf fering in a prolonged way from deprecating half 
truths and outright falsehoods spread throughout the world by 
Lord Beaverbrook, British minister of propaganda. It was not 
until World War I's end that America awakened to the fact, 
for example, that photographs of Belgian nuns "being butch- 
ered by Huns" were in fact still photos prepared by British 
propaganda experts. The sinking of the Lusitania by the German 



115 



submarine U-20, a major factor in bringing America into World 
War I, had been but another British ploy. Winston Churchill, 
then first lord of the Admiralty, stated that the great Cunard 
liner had been a regular passenger vessel carrying an innocuous 
cargo, and that the German attack on her amounted to an un- 
provoked act of war against citizens of a neutral nation, the 
United States. Along with 1,198 others, 124 Americans perished 
in this sinking. But Churchill's statement and the of ficial version 
of the disaster were later disproved. The ship had traveled un- 
escorted, when British Admiralty advisors to Churchill urged 
destroyer escorts. There remains the strong suspicion that the 
ship was deliberately sacrificed by British government leadership 
as a means of drawing the United States into the war on the 
side of England, bled white on the battlefields of Flanders, and 
quite understandably taking any measures to survive and be 
victorious. 

In 1972 Colin Simpson, the British author, in his book Lusi- 
tania, provided fresh evidence that the suspicions going back 
to World War I were valid; that the Lusitunia, with fore- 
knowledge by the Admiralty of U-20's position, had been 
allowed to steam alone into the path of the submarine of f the 
Irish coast; and rather than carrying a harmless cargo the 
passenger liner was in fact heavily armed, with her manifests 
falsified to hide the large load of munitions, which would make 
her a legitimate target of war. Winston Churchill expounded 
his philosophy of how to win a war in his autobiographical 
account of World War I, The World Crisis: "At the summit 
true politics and strategy are one. The maneuver which brings 
an ally into the field is as serviceable as that which wins a 
great battle." 

But the image of German ferocity lingered in peacetime, 
contributing to the savage terms of the Treaty of Versailles, 
signed by Germany under duress, which paved the way for the 
rise of Adolf Hitler. For these and other reasons, Hermann 
Schmitz and Ruhr industrialists generally agreed that in the 
best interests of German economic revival a corporate move 
into Switzerland would be good business. Schmitz also held 
to the old German proverb: "Money won't bring happiness 
unless you have it in a Swiss bank." 

As Schmitz explained to Bormann, he used Eduard Greutert 



116 



and his bank to set up a dozen corporations and 65 accounts, all 
interrelated. The accounts were in many dif ferent names; some 
were paper corporations, some corporate groups or syndicates 
or subsidiaries. The directors of all were Farben of ficers and 
Greutert bank officers. In the early 1920s Schmitz bought out 
Metallgesellschaft A.G.'s interest in Greutert & Cie., and it 
became his own bank. Schmitz was now head of the large German 
dyestuff firm of Badische Anilin, and he began moving his new 
firm's excess capital into his Swiss bank. In 1925 Herman 
Schmitz assembled a merger of the six largest German chemical 
and dye companies: Bayer, Griesheim-Elektron, Weiler-ter-Meet, 
Agfa, Badische Anilin, and Hoechst. The new conglomerate was 
named Internationale Gesellschaft Farbenindustrie A.G., or, 
more conveniently, I.G Farben. It went right on merging with 
and buying out other firms. Schmitz was an early supporter of 
Adolf Hitler and his NSDAP party, and eventually became a 
Reichstag deputy and secret counselor to Bormann and the 
party. 

Martin Bormann had married and become an indispensable 
member of the party leadership. More and more, Hitler turned 
to him for assistance and support, and for financial guidance of 
his personal af fairs and those of the party. It was natural that 
the paths of Schmitz and Bormann would cross, each recog- 
nizing in the other similar aptitudes. 

In Basel, Schmitz's bank, protected by the Swiss regulations 
of privacy, concealed Farben ownership and interests in these 
global firms: Parta-Bayer (French chemical sales), Parta-Cheh- 
amij-Mapro (Dutch, with interests in England, Belgium, and 
Sweden), Romanil and Budanil (Hungarian), Athanil (Greek), 
Defa (Dutch), Norsk Hydro (Norwegian), Traf ford Chemical 
(English), Union Quimica del Norte de Espana, S.A. (Span- 
ish), the Bayer Company, General Aniline Works, Winthrop 
Chemical Company, and Agfa-Ansco (all of the United States). 
Other concealed firms included many in Latin America. All 
these major multinationals owed their existence and ongoing 
prosperity to exclusive use of I.G. Farben patents and licenses 
in the production of chemical and related goods. 

Schmitz organized all these into one giant holding company 
by establishing a new Swiss corporation named Internationale 
Gesellschaft fur Chemische Unternehmunger A.G. — I.G. 



117 



Chemie, for short. Its capital was so structured that voting 
power always remained with Farben board members and elected 
officers of Greutert & Cie., the name of which was changed upon 
the death of Greutert to that of his successor, Hans Sturzeneg- 
ger & Cie. Business went on, with Schmitz calling the shots. In 
Switzerland, he used this private bank, in Germany the Deutsche 
Bank. But he considered it useful to have a special Berlin bank 
relationship for I.G. Chemie, and had the firm buy 60 percent 
control of Deutsche Laenderbank. 

Bormann was fascinated by the complexities of the I.G. Far- 
ben strategies. At the June 1944 conference he got a briefing of 
the Swiss banking system. Bormann did not confide fully to 
Schmitz at this time about his precise intention to shift German 
liquid assets to neutral nations, but the canny I.G. president 
sensed something was in the wind. After all, the Reichsleiter 
was custodian of vast sums, the Reich chancellery fund of the 
party and other moveable assets; also, he needed the services 
of I.G. Farben as well as the skills of its president. Schmitz 
would be informed in full when the time came. 

Hermann Schmitz explained to Martin Bormann that Swiss 
banking was quite special. Under a Swiss law passed in 1934 to 
keep Gestapo agents from locating the savings of German Jews, 
it is illegal for a Swiss bank to divulge information about any 
numbered account. "This also worked to our advantage," 
Schmitz told Bormann. "It insured our secrecy and kept the 
door closed to Allied fiscal investigators about our corporate 
holdings, manipulations, and movement of funds." He added 
that while there are 500 banks in Switzerland there are only 
eight basic categories of banks. The Big Three consists of the 
Credit Suisse Bank, the Union Bank of Switzerland, and the 
Swiss Bank Corporation; while the small big two are the Peo- 
ple's Bank of Switzerland (Swiss Volksbank) and the Bank Leu 
& Co., Ltd. But for the international requirements of such a one 
as Hermann Schmitz, the private bank, in the seventh cate- 
gory, is the bank of greatest usefulness. It issues no balance 
sheets and plays but a minor role in Swiss finance, but it is im- 
portant to world finance and has stature and power way beyond 
its size. H. Sturzenegger & Cie., the renamed Greutert & Cie., 
was such an institution. 

Like its peers, it had an unrestrained freedom to invest as it 



118 



saw fit. Once its fiscal volume reached a good level because of 
its association with I.G. Farben and I.G. Chemie, the entire 
bank turned into a money-making machine. This gave it an un- 
limited power to reach out into other multinationals and even 
into governments. It performed the functions that Schmitz re- 
quired of it: operated cash arbitrage, safeguarded secret slush- 
fund accounts, handled payof fs to generals and admirals and 
politicians of occupied countries and neutral nations, paid some 
of the salaries of overseas spies of the Third Reich, supervised 
I.G.'s corporate marketing cartels, underwrote speculative securi- 
ties, administered issues, sequestered gold reserves, managed 
patents and franchises placed in their safekeeping by Schmitz, 
provided Swiss-franc accounts for multicurrency payrolls, hoarded 
the personal holdings of key executives, transferred and hid 
certain deposits, expedited currency exchange at the most favor- 
able rate of the hour or day, and executed forward contracts in 
cash and commodities-all for a profit. With Schmitz and his 
corporations in its corner. H. Sturzenegger & Cie. was also able 
to enter the realm of biggest profit potential: it placed five bank 
officers on the board of I.G. Chemie. To know the plans of such 
a corporate apparatus is to gain superprofits, the dream of bank- 
ers everywhere, whether in Basel, Zurich, London, or New York. 

Swiss banking is like banking anywhere, although carried out 
with greater confidentiality. Money has neither nationality nor 
morality. As one Swiss banker remarked, "I am not a priest or 
my brother's keeper; I accept deposits and I lend and handle 
money for a fee. World politics plays no part in who shall be 
granted deposit privileges in Swiss banks," he continued. "Pol- 
itics change like governments but our banking strength lies in 
secrecy which must be absolute." The importance of money to 
the Swiss is reflected in aristocracy and leadership. Family aris- 
tocracy is based only on wealth. Lose your wealth, and you are 
no longer aristocracy. 

Switzerland developed as a great banking and money power 
over the last hundred years. By 1939 and the outbreak of war 
elsewhere in Europe the country had become one vast super- 
cartel, the registered home of 2,278 international corporations. 
There was a total of 214 banks with strictly international busi- 
ness, 38 insurance firms controlled from outside the country, 
and 2,026 holding companies, trusts, and personal corporations 



119 



whose majority stockholders were not Swiss. The locals were 
the professional day-by-day managers, whose guiding principle 
was to return a profit to shareholders in Britain, France, Ger- 
many, Holland, Belgium, Luxembourg, and the United States, 
among other countries. Insurance companies registered in Switz- 
erland were generally British capitalized, but the shareholders 
were a spectrum of belligerent nationalities involved in World 
War II. 

By 1981 almost every major American corporation was to have 
a Swiss operation; 4,000 U.S. business organizations would fol- 
low the lead of Hermann Schmitz of the twenties, thirties, and 
forties, and become solid customers of Swiss banks in the sixties, 
seventies, and eighties. Such accounts, however, should not be 
lumped in with the Meyer Lansky type of operation, in which 
a crime syndicate would deposit gangster-gained money into the 
bank he had organized, along with John Pullman, his former 
bag man in the United States, as president of the International 
Credit Bank of Switzerland. This enterprise fell into the Swiss 
banking category "Other," meaning that it was actually owned 
by foreigners, and that unscrupulously earned money, Las Vegas 
and syndicate, would be laundered and returned via Nassau, for 
example, to the United States. The major U.S. corporations 
were drawn to Switzerland because they were increasingly 
involved in commercial ventures in every corner of the world, 
and Switzerland was a money center of the utmost convenience 
and dependability. They could also make even more money by 
engaging in currency speculation, besides having freedom of in- 
vestment. It was nineteenth-century capitalism in the twentieth 
century. The comparatively heavily regulated New York money- 
center banks were able to obtain their footholds in Swiss bank- 
ing in one way or another, and by 1980 they were earning over 70 
percent of their profits from overseas deals. 

So in June 1944, Martin Bormann was taken to the mountain- 
top by Hermann Schmitz, the master. Bormann, a quick study 
and with a steel-trap mind, was preoccupied in the ensuing days. 
Hermann Schmitz, who had eleven I.G. Farben companies 
in Japan, as well as the intelligence organization of Max Ilgner's 
N.W.7, the I.G. Verbindungsmanner who were the liaison of fl- 
eers between Farben in Japan and the home of fice in Germany, 
let him in on some of the fiscal secrets of Emperor Hirohito, 



120 



who used Swiss banks to place his enormous liquid fortune 
beyond the reach of the Allies. So did the industrial and finan- 
cial leaders of Japan, who also knew how to move their wealth 
around the world. 

The Japanese imperial household was no small bureaucracy. 
It represented 3,000 civil servants who ministered to the needs 
of the imperial family and handled the complexities of the many 
companies of the imperial family-zaibatsu holding corporations 
that it controlled. With his immense land holdings and the 
profits from his many investments, Emperor Hirohito was by 
far the wealthiest individual in Japan. Within the structure was 
the lord keeper of the privy seal, the emperor's most important 
advisor, the only one who could of fer unsolicited comments. 
From 1940 to the end of the war the lord keeper of the privy 
seal was Marquis Koichi Kido, who performed just as ably for 
Hirohito as Martin Bormann did for Hitler. 

Kido learned, in 1944, through the Japanese ambassador in 
Berlin, General Hiroshi Baron Oshima, that Reichsleiter Martin 
Bormann had given orders to German industry to begin trans- 
ferring moveable wealth from the Third Reich to neutral nations 
of the world. Bormann, so Oshima said, was also moving party 
funds to Switzerland and Buenos Aires. It was a signal loud and 
clear that Germany had lost the war and was making prepara- 
tions for a future point in time when liquid assets and economic 
power bastions outside the Third Reich would come to the 
assistance of a new Germany. And when Emperor Hirohito 
received his two requested reports on the future of the war in 
the Pacific from his army and navy chiefs of staf f, he, too, con- 
curred that their war could not be won. He asked Kido to pre- 
pare a peace plan for the Japanese nation; and Kido began work 
on it in January 1944. The lord privy seal envisioned the first 
step in any peace plan as one that would preserve the imperial 
throne and its imperial wealth. 

Kido held meetings with key bankers and the transfers of 
imperial money to Swiss accounts was ef fected smoothly via 
bank telegraph credit, inasmuch as major Japanese banks had 
their own correspondent banking relationships with the impor- 
tant fiscal institutions of Switzerland. Emperor Hirohito and 
his imperial household zaibatsu had stock ownership and de- 



121 



posits in fourteen of the major Japanese banks, all of which 
cherished the honor of acting as an imperial depository. The 
fourteen banks gave all assistance necessary, of course, to the 
Kido transfer plan. 

However, as Hermann Schmitz pointed out to Reichsleiter 
Bormann during their 1944 meeting on Third Reich fiscal 
strategy, the most important bank to the imperial family was 
the Yokohama Specie Bank. The family owned a 25 percent 
controlling interest, and therefore it was the major instrument 
used in the movement of large currency credits and other liquid 
assets to Switzerland, where Yokohama Specie Bank had a branch 
and correspondent relations with Swiss and German banks. The 
importance of Yokohama Specie to the German Central Bank 
and the economic conduct of the war, which also generated 
further income from the bank's major shareholder, was con- 
tained in a code intercept by "Magic," the U.S. code breaker 
structure, in a message from the Japanese ambassador in Berlin 
to Tokyo on March 19, 1942: 

Pending consummation of the German-Japanese economic talks in 
Tokyo and their satisfactory conclusion by March 31, Germany will 
place 10,000,000 marks to Japan's credit in payment for war materials 
delivered to that date. The technical details concerning use of the 
fund and repayment will be handled by the German Reichsbank 
and the Yokohama Specie Bank. 

In his transfer plan of 1944, Lord Privy Seal Kido was con- 
fronted with the problem of physically moving the emperor's 
gold kilo bars from the Imperial Palace to some safe haven 
where their value would be credited to the imperial account in 
Switzerland. In 1944, when Japanese fighter planes still con- 
trolled the air space of northern Asia, this proved a soluble 
problem. The major Swiss banks, such as Swiss Bank Corpora- 
tion, have five key areas throughout the world where gold and 
silver bars can be deposited in Swiss controlled vaults, with a 
credit then telegraphed to the relevant bank in Switzerland. 
These key localities are known in the Swiss banking business 
as "Loco," so once Kido had dispatched a Japanese imperial 
courier plane with fighter escort to Hong Kong and Macao and 
other sites with imperial kilo bars they quickly became a deposit 



122 



credit in the Swiss receiver bank. By the end of the war the 
deposits on hand were astronomical, and during the postwar 
rehabilitation of Japan, the imperial fortune kept increasing 
from the interest charges for loans to various zaibatsu companies 
who were struggling-as were German firms — for a comeback in 
world markets. 

As a result of these tranfers, American SCAP * fiscal investi- 
gators found the imperial vaults pretty nearly bare when they 
went poking through the recorded assets in the imperial palace 
following Japanese surrender aboard the U.S. S. Missouri on 
September 2, 1945. They found jewelry, gold, silver, coins 
totaling 3,010,066 yen, and as the yen at that time was worth 
about 360 to the U.S. dollar, it was a token 12 million. 

While the emperor was having his liquid assets banked out 
of Japan, the other zaibatsu leadership groups placed on deposit 
these sums in the following countries: Switzerland, $19 million; 
Sweden, $1.6 million; Portugal, $999,000; Spain, $22,000; Af- 
ghanistan, $118,000; Turkey, $107,500. But these sums were 
currencies and trifling alongside the billions in gold that flowed 
from Japan in the last year of the war. The Joint Chiefs of 
Staff in Washington and Ambassador Edwin W. Pauley, who 
reported to President Truman on reparations, recommended 
that the bulk of Japan's gold be deposited in the U.S. Mint in 
San Francisco. Pauley said the value would not exceed $200 
million. But his advisors were basing this estimate on Japanese 
smelter records and gold production figures from 1940 to 1945 
at the Kamioka mine and other smaller mines on the west coast 
of Honshu, which showed a declining gold production of only 
1,173 fine ounces; and inasmuch as many banking records in 
Tokyo covering gold deposits had been previously removed 
from the files or burned, most often blamed on the firebombing 
of Tokyo, no true figure could be arrived at by SCAP. 

However, what SCAP and Ambassador Pauley did not take 
into consideration was the loot of Asia, and by 1944 Japan had 
taken 25 tons of gold from the vaults and mines of various 
Asiatic countries it had overrun. Like the Third Reich, the 
Japanese pattern of conquest and pillage prevailed. As armies 

^Supreme Commander, Allied Powers. 



123 



marched, fought, and conquered, they were followed by the 
ubiquitous bankers and business specialists who assumed eco- 
nomic control of the lands and people and assets they coveted. 
They seized gold and formed companies to mine for minerals, 
oil, coal, and all other substances necessary to a resource-poor 
country like Japan. As it established companies in Manchuria, 
China, Taiwan, Korea, Hong Kong, Singapore, the Philippines, 
French Indo-China, Burma, and the Dutch East Indies it did 
so beneath the imperial banner and patriotic slogans: "The 
Emperor is divine, and the Japanese people are superior to other 
races and are fated to rule the world." But behind the slogans 
was a hard-headed commercialism dedicated to profits for the 
zaibatsus, which included the imperial household zaibatsu, tun- 
neled through stock ownership in the scores of corporations 
established in banking and industry of each conquered country. 

Like so many other moveable assets, the 25 tons of gold 
bullion disappeared in 1944, and this is a secret known only to 
a cadre of top leadership among the zaibatsu. Still, when Gen- 
eral MacArthur finally implanted a new constitution on Japan 
and approved a new government in 1947, this leadership in- 
formed the supreme commander that $2 billion in gold had 
been flown back from bank vaults in Korea in August 1945, and 
sunk in sealed containers in Tokyo harbor. It requested in 1947 
that this treasure be retrieved and placed in the national treasury 
to secure the new currency. General MacArthur readily agreed, 
but it was the first 25 tons of gold that formed an economic 
bedrock which helped Japan rise from the ashes. Toil and sacri- 
fice and American aid were all part of the contributing picture, 
but as Martin Bormann remarked about the advisability of 
placing German assets beyond the reach of the Allies, "the 
Fatherland will need this to rise again." 

In 1944 while the lord privy seal was making his peace plans, 
Emperor Hirohito waited for the ultimate excuse for withdrawal 
from the war. Kido had recommended the removal of Prime 
Minister Tojo from of fice in 1944. Tojo had originally been 
placed in office on the recommendation of Kido, but now he was 
to take the blame for the defeat and for the atrocities that 
Japanese forces had committed when it was foreseen that the 
war was lost. Actually, the war had been planned in the War 
Room of the Imperial Palace, from the attack and rape of 



124 



Nanking to the bombing of Pearl Harbor, with the emperor an 
interested participant in all major strategic decisions. From 
February 1944 to the fall of the Tojo cabinet, all cabinet meet- 
ings were held in the Imperial Palace to impress the public with 
the seriousness of the situation as well as to give imperial sanc- 
tion to emergency measures. At one cabinet meeting, Kido had 
remarked, "If the Tojo cabinet continues in power it will surely 
mean revolution within the country, and domestic disruption 
will destroy Japan." To the lord privy seal it also meant that 
the imperial household and the emperor would be destroyed. 
Kido moved to cosmeticize the role of the emperor in the war, 
stressing always that he had only been a benevolent figurehead. 

Kido knew the people would have to be prepared for sur- 
render. The fighting men had staked their honor on victory or 
suicide, and vast numbers had died in the emperor's name. If 
peace was premature, many would say that Hirohito lacked the 
courage to fight the war through to the end. Widows and or- 
phans would blame the emperor for causing their fathers and 
husbands to die in vain. The emperor and Kido knew that the 
people had reached the point where they were eager to see an 
end to war. When the time arrived that they thought it was 
they who had fought poorly and let the emperor down, then and 
only then, if Hirohito declared for peace, would the people feel 
obligated to him. 

As the lord privy seal focused on his imperial peace plans, the 
emperor studied the charts in his War Room. It is a myth that 
the emperor stood above shot and shell; from 1937 to the war's 
end, he had been closely involved in the conduct of Japanese 
expansion into China and to the south and west. He had ap- 
pointed Tojo as prime minister for his warlike qualities, and 
when he spoke with Admiral Yamamoto before the attack on 
the United States he had asked the admiral's opinion as to how 
the war would go. Admiral Yamamoto had said, "I will run 
wild for the first eighteen months of the war and after that it 
will be all downhill. But I will do my duty for the emperor." 
Hirohito had nodded, replying, "By then Hitler will have won 
his war in Europe and the United States will make an accom- 
modation with Japan which will give us much of the territory 
we have gained." The emperor must have recalled this conver- 
sation when he was informed of Admiral Yamamoto's death at 



125 



Bougainville in 1943. The admiral was on an inspection trip, 
and his plane was shot down after his flight schedule in code 
had been intercepted by the code breakers of "Magic." 

The research and analysis branch of the OSS had prepared a 
secret report in September 1944 for the U.S. Joint Chiefs of 
Staff. It told in some detail of the involvement of the Japanese 
emperor with the war: 

At the inception of the present war, the Emperor issued the con- 
ventional Imperial Rescript declaring war in his name, and continued 
to follow his usual pattern of keeping out of politics. However, as it 
became evident that victory would not be easily won, the ruling 
group found it necessary to use the Emperor's name as an incentive 
to greater effort. 

With the Allied advance in the Pacific, the Emperor was called 
on to furnish even stronger incentives to the Japanese people, and 
he thus became more entangled in the activities of the dominant 
military group. In November and December, 1943, the Emperor 
issued two Imperial Rescripts honoring the Navy for completely 
fictitious "victories" of f the Solomon and Gilbert Islands — an 
unprecedented mortgaging of the Imperial dignity for the purpose 
of restoring faith in the naval conduct of the war. 

While the emperor waited for an excuse for withdrawal from 
the war, he approved the many defensive measures being under- 
taken to repel the invaders. Like Hitler, he toyed with the 
thought of leaving the nation's capital. So some 75,000 men 
toiled beneath the peaks and valleys of the Nagano Alps build- 
ing tunnels in which Hirohito could preside over the final de- 
fense of Japan. But, like Adolf Hitler, the emperor had no 
intention of leaving Tokyo. His propaganda minister, like Dr. 
Goebbels in Berlin, fostered the notion of battle to the last, but 
it was smoke of sorts, contrived to make more steadfast the 
flagging will of the people. 

On August 7, 1945, the emperor was presented with his rea- 
son to initiate peace. He received the Japanese army report of 
the atomic destruction of Hiroshima. Two days later, on August 
9, a second A-bomb was dropped on Nagasaki. 

Although the emperor and Lord Privy Seal Kido had been 
thinking about surrender for nineteen months before the two 



126 



atomic bombs fell, it took only days for Emperor Hirohito to 
agree to surrender terms on the Potsdam Declaration. 

At this point in time, as in Berlin, the preparations for post- 
war commercial survival for two defeated nations had been 
completed, and now only the final scenario had to be played 
out. For Bormann, the blueprint was clear and he was to follow 
it with precision. For the emperor and Kido, General MacArthur 
was to be a worthy protagonist. In the end, the emperor and the 
supreme commander came to admire each other, and it was 
MacArthur who in the end dissuaded the War Crimes Com- 
mission in London from trying Emperor Hirohito as a war 
criminal. He said: 

"His indictment will unquestionably cause a tremendous con- 
vulsion among the Japanese people, the repercussions of which 
cannot be overestimated. He is a symbol which unites all Japa- 
nese. Destroy him and the nation will disintegrate. They will 
regard Allied action as a betrayal in their history and the hatreds 
and resentments engendered by this thought will unquestionably 
last for all measurable time. A vendetta for revenge will thereby 
be initiated whose cycle may well not be complete for centuries, 
if ever. 

"I believe all hope of introducing modem democratic methods 
would disappear. It is quite possible that a minimum of a 
million troops would be required which would have to be 
maintained for an indefinite number of years." 

There was more to the MacArthur opinion, but the thought 
of a million Allied troops with a vast bureaucratic force chilled 
the War Crimes Commission. As a consequence, it was decided 
to settle for a war crimes trial at a lesser level. Lord Privy Seal 
Kido was tried as a war criminal, along with 36 others, and 
sentenced to life imprisonment. 

At the time of this trial, Kido's counterpart in Germany, 
Martin Bormann, was to make his plans for personal survival, 
and they did not include prison and death at Nuremberg. 

The zaibatsu was to be outlawed during the occupation of 
Japan by General MacArthur as a way of breaking the strangle- 
hold held by the few on the economy of this nation. But once 
the occupation ended and Japan again became master of her 
own destiny, the family-controlled holding companies were to 



127 



make their comeback bigger and stronger than ever before, un- 
der the name "Keirestsu," which also means "group." Today 
the six big Keirestsus control the economy; in fact, they are the 
economy. The six largest groups control 40 percent of the 
nation's corporate capital, and 30 percent of its corporate assets. 
The trading companies of these six Keirestsu hold stock in more 
than 5,400 companies in Japan, and the Keirestsu banks own 
even more. The Mitsubishi and Mitsui families were zaibatsu 
before their holding companies were broken up by MacArthur, 
but today they are comfortable Keirestsu. It was never General 
MacArthur's purpose to strip clean the imperial family, but to 
breathe some fresh, contemporary air into an archaic economy 
by removing strictures that had generated a war machine based 
on absolute strength, the basis of Japan's military might before 
and during World War II. 

Hirohito was to turn over to the people of Japan his forest- 
lands, museums, artistic treasures, and heirlooms. However, the 
wealth that had been transferred on his behalf as well as on 
behalf of the other zaibatsu families was never touched and 
represented bastions of economic strength, as did the wealth 
that was established by Martin Bormann on behalf of the Third 
Reich. 

As was proven in time, the wealth and the corporations con- 
trolled by the Bormann organization, on the one hand (in the 
Federal Republic of Germany, 1 percent of the corporate lead- 
ership controls 40 percent of the industry and finance), and by 
the zaibatsu/Keirestsu, along with the holdings of the imperial 
family, were the basic instruments that guided both defeated 
nations back to economic power. 



128 



DURING THE BATTLE FOR THE ARDENNES IN 
December of 1944, Hitler's headquarters on the Western Front 
was hidden underground in a woods one mile northwest of 
Ziegenberg. It was realized there that the failure of this offensive 
meant the war was ended. All to follow was charade, merely a 
resistance that would continue to take Allied and German lives 
until May 1945. At the height of the Battle of the Bulge, cham- 
pagne was served in the Western Headquarters bunker 
on Christmas day, and a euphoric Hitler spoke optimistically of 
1945. 

One man not at all euphoric was Martin Bormann, deep in 
his circumspect designs to enable Germany to emerge from 
certain military defeat to commercial victory in the postwar 
world. On this Christmas day, the Reichsleiter sipped cham- 
pagne with the others of the headquarters staff and agreed with 
Hitler that 1945 would be a very interesting year indeed. He 
then stepped back into his office, to the papers spread out on 
his desk, some of which were reports received as to the progress 
of his flight capital program, which had been launched immedi- 
ately following the meeting of German industrialists in Stras- 
bourg on August 10. 

On one report he noted that the plan to increase the registra- 
tion of German patents in neutral nations had proceeded 
satisfactorily. In Sweden, for instance, patent registration in 



131 



1938 had been 1,618, but after the Strasbourg meeting in 1944 
the patent registration had risen to 3,377. The ownership of 
patents represents a blockhouse of power in any commercial 
contest, and the most important German industrial corporations 
were doing their best to maintain their ownership of vital proc- 
esses. The firms represented on the memorandum were I.G. 
Farben, Zeiss-Ikon, Bosch, Daimler-Benz, A. E.G., and Siemens. 
There was a similar increase in patents by these and other Ger- 
man firms in Switzerland and Portugal. 

Bormann had another report, on the continuing creation of 
assets in the neutral nations. German trade with and payments 
to these were carried on mainly through clearing agreements. In 
Spain, Sweden, and Turkey a two-price system was now being 
used for German goods. The lower price was paid through the 
clearings (the total of banking claims presented daily in settle- 
ment of accounts at a clearing house) while the higher price 
was retained on the books of the neutral importer. The differ- 
ence accumulated was paid to the account of the German 
importer-exporter, becoming flight capital on deposit. To give 
some idea of the size of such deposits: within months of the 
inauguration of the two-price system, Swedish firms owed about 
$18 million in kroner and Turkish firms S12 million in Turkish 
lira. As goods shipments increased the sums on deposit in neu- 
tral banks accelerated, then the excess capital was invested in 
local real estate and industry. 

Balance sheets showed Bormann that eleven mines in central 
Sweden were now owned by German firms and operated directly 
or indirectly through Swedish companies by the large German 
steel firms of Roechlingsche Eisen and Stahlwerke G.m.b.H., 
Voeklingen, Saar; Hosche, Dortmund; Friedrich Krupp, Essen; 
Gutehoffnungshutte, A.G., Oberhausen; and Vereinigte Stahl- 
werke, Diisseldorf. The coal now mined was shipped to Ger- 
many, with German firms paid in Sweden under the two-price 
system . 

Members of the German steel cartel (such as Vereinigte 
Stahlwerke, of which Hermann Schmitz was a director, Man- 
nesmann, Krupp, Gutehoffnungshutte, and Stahlunion) all 
owned related enterprises in Sweden, and the importation, han- 
dling, and transportation of coal and coke became almost a 
projection of Germany's coal industry. In shipbuilding, the 



132 



Swedish companies owned or controlled by German shipping 
interests accepted vessels built by the Swedish firms and kept 
them in Swedish waters until after the war. A further example 
of masked investment was the money paid into the Swedish 
shipping firm of Reded A/B Skeppsbron, which received a 
German-guaranteed loan of $3 million made from German 
supplies of free Swedish kroner in which the vessels were mort- 
gaged to the lender. Although the Swedish company remained 
officially the owner of the vessels, the German Hamburg- 
Amerika line was the real owner. 

Martin Bormann also knew that the vast funds sent outside 
the Third Reich under his new Nazi state policy were rapidly 
concealed in safe havens. In Sweden, the technique was to use 
Swedish cloaks or German-controlled local nationals to increase 
the recapitalization of Swedish firms. This produced a further 
stock buy-in by German interests. A big penetration was made 
into commercial and mercantile enterprises, where nearly two 
hundred Swedish firms were now operating on capital wholly 
or in part supplied by Germans or German firms. 

In 1944 there was intense pressure on Sweden by American 
and British government representatives to halt the export of 
iron ore, special steels, and machine tools to Germany. The 
Allies also wanted to deny the Germans Swedish ball bearings, 
a prime element in all machinery of war used by the Wehr- 
macht and Luftwaffe. They also wanted German military traffic 
through Sweden to Norway stopped. An interesting sidelight to 
this struggle between the Allies and Germany for influence on 
Sweden is the peculiar role played by Marcus and Jacob Wallen- 
burg, members of Sweden's most important banking family. 
Marcus headed a government commission which negotiated 
trade and political agreements with Britain and the United 
States throughout the war. At the same time, his brother Jacob 
was chief trade and economic negotiator for the Swedish gov- 
ernment with Nazi Germany. Thus were both sides covered 
for Swedish business, including the family's own very substantial 
economic interests. Following World War II, this family empire 
was to achieve its most spectacular prosperity, as German in- 
vestments under the Martin Bormann program matured in their 
Swedish safe-havens. In this way impressive wealth accrued to 
the Wallenburgs as well as to other Swedish and German 



133 



investment groups controlling large holdings in the many Swe- 
dish companies under German dominance in 1944. For a time, 
however, in 1944 under the pressure of threatening to place 
Sweden on an Allied blacklist, coupled with promises of com- 
pensating Allied orders, Sweden agreed to Allied demands in 
December 1944, the very week Martin Bormann was reviewing 
German investments in Sweden. He shrugged at the news clat- 
tering over the teletype from Berlin. The agreement pleased the 
Allies but failed to dent the Bormann-sponsored hidden in- 
vestment program in Sweden. The war would be over anyway 
in a matter of months, and business would pick up again. The 
binding ties of marriage, finance, and investment between Swe- 
den and Germany were stronger than ever, and with peace 
would come a lessening of Allied probing into German financial 
and business manipulations, particularly when so many Swedes 
had a personal stake in the growth and prosperity of every firm 
owned or controlled by German interests. The Allies were 
advancing everywhere on the battlefronts and in their diplomatic 
arm-twisting of neutral nations. Yet the outlook of Reichsleiter 
Bormann differed little from the pragmatic cynicism of Her- 
mann Rochling, the Saar steel magnate, who, when told in 
December 1944 that the Saarland would be overrun in days by 
American forces, replied almost indifferently: "We have lost the 
Saar once before and won it back. Old as I am, I shall see it 
return to our possession again." And so it did. 

The movement of German assets into Switzerland had also 
gone well, Bormann noted from his reports. Flight capital in- 
vestments had been accomplished principally through the estab- 
lishment of subsidiaries of powerful German firms. Over half 
the total German capital in Switzerland was used in setting up 
holding companies representing I.G. Farben, Merck, Siemens, 
Osram, Henkel, and others. A holding company may not trade 
in any form. It may only hold stock in other companies, but 
through this device the existing German firms, and the 750 new 
corporations established under the Bormann program, gave 
themselves absolute control over a postwar economic network of 
viable, prosperous companies that stretched from the Ruhr to 
the "neutrals" of Europe and to the countries of South America; 
a control that continues today and is easily maintained through 
the bearer bonds or shares issued by these corporations to cloak 



134 



real ownership. Bearer shares require no registration of identity, 
for such shares are exactly what they mean; the bearer of the 
majority shares controls the company without needing a vestige 
of proof as to how he acquired them. Thus the Germans who 
participated as a silent force in Bormann's postwar commercial 
campaign-which is sometimes referred to by aging Nazis as 
"Operation Eagle's Flight" or "Aktion Adlerflug" — insured their 
command over the industrial and financial institutions that were 
to move the new Federal Republic of Germany back into the 
forefront of world economic leadership. 

In Switzerland the most substantial investments were in 
chemicals and drugs, and in electric power and equipment. Ger- 
man investments totaled $300 million, of which bank deposits 
(cash and securities) amounted to about S250 million, with 
direct investments about $50 million. In the German-Swiss 
clearings, Germany's debt, as the new year of 1945 began, was 
1,000 million Swiss francs ($2 32.1 million). Swiss investments 
in Germany and prewar loans to Germany were $445 million. 

Six Swiss private banks were now used by German firms in the 
flight capital program: H. Sturzenegger &Cie., Rochling &Co., 
Johann Wehrli and Company, Bank Wadenswil, Basler Han- 
delsbank, and Kreditanstalt. However, all major Swiss banks 
were serving the Germans in the massive movement of funds. 
The big German banks, Deutsche, Dresdner, and Commerz- 
bank, all had their regular Swiss affiliations through which they 
worked. Deutsche had as its principal connection Credit Suisse, 
and also did business with the Swiss Bank Corporation and the 
Banque Federate. Funds transferred from Berlin for a client list 
approved by Bormann went into numbered accounts, and were 
either held there for local investment or soon shifted to neutral 
nations elsewhere in Europe or overseas, to be credited to the 
accounts of appropriate German corporate subsidiaries, or else 
to entirely new corporations awaiting these start-up monies that 
would enable them to go into business using German patents. 
As these new corporations prospered, they generated more 
money and profits, becoming important elements in the Bor- 
mann global economic scheme. 

Seven hundred and fifty new corporations were established in 
the last months of the war under the direction of Reichsleiter 
Bormann, using the technique perfected by Hermann Schmitz. 



135 



A national of each country was the nominal head of each cor- 
porate structure and the board was a mix of German adminis- 
trators and bank officials, while the staffing at senior and middle 
management levels was comprised of German scientists and 
technicians. In the background were the shadowy owners of the 
corporation, those Germans who possessed the bearer bonds as 
proof of stock ownership. The establishment of such companies, 
usually launched in industries requiring high technical skills, 
was welcomed in Spain and Argentina, to give two examples, 
because those governments appreciated that German companies 
would generate jobs and implement a more favorable balance 
of trade. Country by country, a breakdown by U.S. Treasury 
investigators of these new 750 German firms was as follows: 
Portugal, 58; Spain, 1 12; Sweden, 2 33; Switzerland, 214; Turkey, 
35; Argentina, 98. 

Gold always held a great attraction for Martin Bormann, as it 
did for all German bankers and economic leaders of the Third 
Reich. In fiscal conferences during the occupation years, in 
Brussels, Paris, and Amsterdam, the German economic special- 
ists would always advocate more printing of local currencies by 
the state treasury. But when it came to safeguarding their own 
means, it was gold, always. Perhaps it was a subconscious hold- 
over from the early 1920s7 when the currency of the Weimar 
Republic had become virtually worthless. In 1943, when Bor- 
mann was sitting tall in the saddle as Hitler's right hand and as 
leader of the Nazi Party throughout the world, as well as chair- 
man of his own banking committee, which oversaw the banking 
practices of every bank in Germany and the greater Third Reich, 
the Reichsleiter made sure that gold bullion was drawn into the 
vaults of the Reichsbank and of the three big commercial banks 
in Berlin. The gold, whatever its origin, would be stamped with 
Third Reich seals and periodically sold to leading Swiss banks, 
as well as to the Swiss National Bank. These banks purchased 
several hundred million dollars of such gold, paying in Swiss 
francs, which the Germans preferred at this point. The money 
was then left on deposit in various numbered accounts to be 
invested in Switzerland and in other neutral countries, and 
ultimately to maintain the Bormann party apparatus abroad. 

These banking channels aside, Martin Bormann had other 
ways to disperse German assets outside of the Third Reich. The 



136 



diplomatic pouches of Joachim von Ribbentrop's Foreign Min- 
istry were used to transport gold, Amsterdam diamonds, bearer 
bonds, and U.S. stocks purchased over the years in large Ameri- 
can corporations. A Foreign Ministry special courier went twice 
monthly to Stockholm, where the gold and diamonds he carried 
were sold for kroner currency and then invested in Swedish 
firms. A similar pattern was developed for South America, where 
deposits were made in the Buenos Aires branch of Deutsche 
Bank. Many individual Nazis, with Bormann's permission, trans- 
ferred their own assets. Von Ribbentrop in one shipment banked 
SI million, allegedly using an Argentinian intermediary named 
Pedro Rodrigues Panchino as his five percenter, according to the 
French newspaper, France-Soir, in its edition of February 10, 
1945. The hangman claimed von Ribbentrop at Nuremberg. So 
the throwaway question is whether the Argentinian kept the 
money in his own name or it was turned over to Bormann's 
account. I would think the latter, for one doesn't fool with SS 
men charged with guarding such sums on behalf of the NSDAP 
in exile. Others wanting large deposits in Portugal or Spain 
would first ship gold to Switzerland, order it sold, then have a 
check or bank draft sent to Madrid or Lisbon in care of their 
money agent, where it would be deposited and then claimed at 
the end of the war. 

Turkey, too, did a brisk business in gold and other assets. 
The week when three German armies were attacking in the 
Ardennes, German assets in Turkey on the record totaled $30 
million, and the Turkish-German clearing account was $1 5.7 
million in favor of the German government. Neither figure tells 
the whole story of Nazi resources in Turkey. Two branches of 
German banks, the Deutsche Istanbul and the Deutsche Orient 
(a branch of the Dresdner Bank), were depositories for a steady 
flow of bonds, cash, gold, bank deposits, and foreign exchange 
belonging to German firms and individuals. In Turkey, as in 
other neutrals, the Germans had also been able to achieve a safe 
haven for their money, by preventing the normal repatriation of 
foreign earnings. For example, both major German banks had a 
policy approved by Bormann of accumulating in Turkey all 
annual profits of the war years, rather than returning the money 
to Berlin. It just piled up as a bookkeeping item ready for trans- 
fer to South America or investment in Turkish business and 



137 



commerce. Six big German insurance companies with branches 
in Turkey followed the same policy. Further, they followed a 
policy of linking Turkish insurance companies to their own 
operations by granting readily available German capital in re- 
turn for stock considerations. Thus, these insurance firms gen- 
erated large fluid assets that they invested in real estate and 
other properties. More than sixty German-controlled firms were 
the linchpin of the Turkish economy, and ran the gamut from 
construction to chemicals. In 1944 gold trading grew very active, 
with Deutsche Bank selling $5.5 million in gold coins for clients. 

When in 1944 Turkey severed diplomatic relations with the 
Third Reich, joining the Allies in 1945, just four months before 
German surrender, there was no blocking of German assets. 
Thus, the two German banks in Turkey were enabled to trans- 
fer millions to their branches in Spain and Argentina. The 
German firms that had taken on a Turkish coloration of owner- 
ship were to be reclaimed by their German owners after the war. 

Throughout this period of asset transfer, Reichsleiter Bor- 
mann's goal was to have as much foreign exchange as possible 
in position in all neutral nations in both hemispheres. Aside 
from the Swiss banks, which made all currencies readily avail- 
able in exchange for goods, trade, or gold bullion sales, the 
export of German products to neutral nations added to the gen- 
eral foreign exchange funds. Upon receipt of German goods, an 
agency in Spain-for example, the Spanish Foreign Exchange 
Institute-would credit pesetas to a German-controlled import- 
export company. With such funds accumulating rapidly in 
Spain, Portugal, Sweden, Switzerland, and Argentina, Bormann 
and his group, who were handling the fortunes of 750 new cor- 
porations, would use these corporations in neutral countries as 
cloaks for investing in American companies. Bormann always 
had a high regard for U.S. blue chip stocks as a stable invest- 
ment, consistently purchasing a vast number of shares from the 
European offices of such New York stock brokerage houses as 
Merrill, Lynch on behalf of the Reich chancellery and Hitler, 
until war became official between the United States and Ger- 
many and the buying stopped, for a time. 

In 1941, investments in U.S. corporations by German com- 
panies and assorted German individuals held voting ownership 
in 170; minority ownership was held in another 108 American 



138 



companies. These businesses covered the following fields: manu- 
facturing (foodstuffs, chemicals, electrical and automobile 
equipment, machinery and machine equipment, other metal 
products); petroleum production, refining and distribution; 
finance; trade; and miscellaneous. 

American industry, of course, had a financial stake in German 
industry. In the same year, 1941, 171 U.S. corporations had 
major investments in German firms amounting to $420 million. 
A listing of these corporations is identical to the general cate- 
gories under German ownership in the United States. 

When Bormann gave the order for his representatives to re- 
sume purchases of American corporate stocks, it was usually 
done through the neutral countries of Switzerland and Argen- 
tina. From foreign exchange funds on deposit in Swiss banks 
and in Deutsche Sudamerikanische Bank, the Buenos Aires branch 
of Deutsche Bank, large demand deposits were placed in the 
principal money-center banks of New York City: National City 
(now Citibank), Chase (now Chase Manhattan N.A.), Manu- 
facturers and Hanover (now Manufacturers Hanover Trust), 
Morgan Guaranty, and Irving Trust. Such deposits are interest- 
free and the banks can invest this money as they wish, thus 
turning tidy profits for themselves. In return, they provide rea- 
sonable services such as the purchase of stocks and transfer or 
payment of money on demand by customers of Deutsche Bank, 
such as representatives of the Bormann business organizations 
and Martin Bormann himself, who has demand accounts in 
three New York City banks. They continue to do so. The Ger- 
man investment in American corporations from these sources 
exceeded $5 billion and made the Bormann economic structure 
a web of power and influence. The two German-owned banks 
of Spain, Banco Aleman Transatlantico (now named Banco 
Comercial Transatlantico), and Banco Germanico de la America 
del Sur, S.A., a subsidiary of Deutsche Bank, served to channel 
German money from Spain to South America, where further 
investments were made. 

Argentina was the mecca for such money in the Western 
Hemisphere, and when Bormann gave the go-ahead in his over- 
all flight capital program after the decisions at Strasbourg, over 
$6 billion of this money flowed into Buenos Aires for invest- 
ment there and elsewhere in Latin America. The investments 



139 



covered factories, hotels, resorts, cattle, banks, land, sugar and 
coffee plantations, metallurgy, insurance, electrical products, 
construction, and communications. It was much the same 
investment spectrum as established in Spain. West German in- 
vestments today account for nearly 45 percent of all foreign 
investments in Spain. 

Before D-Day four Paris banks, Worms et Cie., Banque de 
Paris et des Pays-Bas, Banque de l'lndochine (now with "et de 
Suez" added to its name), and Banque Nationale pour le Com- 
merce et l'lndustrie (now Banque Nationale de Paris), were 
used by Bormann to siphon NSDAP and other German money 
in France to their bank branches in the colonies, where it was 
safeguarded and invested for its German ownership. 

In addition to overseeing his 750 new corporations, Martin 
Bormann was also kept apprised of I.G. Farben's activities in 
neutral countries, as well as the intensified activities of other 
major firms that were utilizing the new Bormann policy of 
transferring Third Reich money to subsidiaries. Farben had 
eight subsidiaries in Argentina, three in Portugal, four in Swe- 
den, six in Switzerland, and fourteen in Spain. A.E.G., the giant 
electrical equipment manufacturer, had six subsidiaries in Ar- 
gentina, three affiliates in Spain, and four in Sweden. In brief, 
every major German corporation with an international operation 
strengthened its branches, subsidiaries, and affiliates with an 
influx of new money and talent that included scientists and 
technicians arriving weekly ready to perform laboratory research 
in Spain and Buenos Aires. 

Early in January 1945 Adolf Hitler and Martin Bormann, in 
company with the rest of their headquarters staff, left the 
Ardennes sector and traveled back to Berlin. On January 12 
Stalin launched his Soviet winter offensive. The Fuehrer was in 
his main office in the chancellery, Bormann just adjacent. A 
briefing on the battle in the East given by General Heinz Gu- 
derian had been concluded. It had been a stormy session, in 
which Guderian was pessimistic about holding, and strongly 
urged that German forces fall back. Hitler resisted this sugges- 
tion with anger. Afterward, Reichsleiter Bormann was visited in 
his own office by Heinrich Mueller, SS chief group leader and 
senior general of the Waffen SS. As Bormann was skillful in 
administration and world fiscal affairs, Mueller was equally tops 



140 



in his own area of competence, secret state police affairs. He 
told Bormann that Ernst Kaltenb runner, chief of the Gestapo 
and an SS general, had gathered a small personal treasure and 
was sending it by armed SS convoy to a hideaway. Mueller 
handed to Bormann the listing, which read as follows: 50 kilo- 
grams of gold bars, 50 cases of gold coins and gold watches, 
2 million American dollars, 2 million Swiss francs, five cases 
filled with diamonds and other precious stones, one stamp col- 
lection worth 5 million gold marks. 

"Well," Bormann commented, "Ernst is still looking out for 
Ernst. It doesn't mean much to the big picture. But find out 
where he has it taken. When it's buried, and it will probably be 
in an Austrian lake close to his home, we might want one of 
our party gauleiters to watch over it. Kaltenbrunner may never 
last the war out, and it would be useful to the party later." 

Mueller stood at attention, nodded, and left the office. 

Kaltenbrunner finished the war out but never made it to his 
treasure. He did receive a report from his aide that it was secure, 
sunk deep in waterproof containers in Ausee Lake, but he was 
one of the ten convicted and executed in the prison gymnasium 
at Nuremberg. 

Field Marshal Kesselring, during his retreat in Italy, before 
surrendering his 1 -million-man force to the Allies, ordered $4.8 
million in assorted valuables sunk in the waters around Verona. 
He wanted it safely out of the grasp of Italian communist 
partisans. 

Corsica was held by German and Italian troops in the summer 
of 1943. The coastal areas, that is, and the principal cities — the 
capital of the island, Ajaccio, with its 25,000 people living 
around the bay, Bastia and its bay likewise ringed with people, 
and the coastal regions. But despite the armed might of the 
Axis troops, the Corsicans controlled the inland mountainous 
region, where hardly a road existed. The rugged dwellers had 
footpaths and trails throughout the wild interior, and they had 
the patience and wily wisdom of their forebears. They knew that 
in time the Germans and Italians would depart, as had the 
Romans and the Vandals, the Visigoths, the Saracens, the 
Genoese, and the French. Through the centuries, Corsicans had 
engaged in trade with their invaders. They did so now with the 



141 



Germans and Italians, and would soon be doing likewise with 
the Americans and British and Free French who were to come. 

The Germans and Italians were making preparations to leave, 
and were watched, as always, by members of the Unione Corse, 
the ancient secret organization whose tentacles spread to Mar- 
seilles and through the underworld of Europe. They watched at 
the Bay of Bastia during the month of September as German 
E-boats and frogmen searched the bottom of the bay for a 
treasure they were unable to locate. 

The Germans were searching for a shipment of gold bullion, 
diamonds, jewelry, and currencies, which had been sealed in six 
lead containers and placed aboard an E-boat at Tripoli earlier 
in 1943. It was loot of North Africa, valued at an estimated $150 
million, and had been collected by a special unit sent from 
Berlin by Reichsleiter Martin Bormann, to add to the Reich 
chancellery fund of the NSDAP. As the Afrika Korps retreated 
under the ferocious onslaught of the British Eighth Army, the 
treasure had been packed up and shipped out of Tripoli. This 
port in Libya was especially striking because of the waterfront 
facade built by Italian stonemasons. The E-boat, under com- 
mand of officer Hauptmann Dahl, moved out of Tripoli harbor 
at high speed, then was lost from view in the Mediterranean's 
dark blue. On the water to Italy, Hauptmann Dahl was ordered 
from Rome to head for Corsica with the sealed treasure; he was 
to join a German naval convoy off Bastia, which would then 
steam north to German naval headquarters at La Spezia, in 
northern Italy. There they were to unload the consignment and 
take it by truck to Milano, where it would go by train over the 
Alps to Germany and on to Berlin. Dahl had made it to the 
coast of Corsica but before he could join the convoy an Allied 
air attack dispersed the German and Italian ships, sinking sev- 
eral. Steering a course along the shoreline was all that he could 
do; Dahl didn't dare to venture ashore because on this night he 
could see a firefight in progress between German troops and 
guerillas. He had headed for the estuary of Golo and there, 
about four kilometers off the port of Bastia, unloaded the six 
lead containers, as a safekeeping measure. He ordered his of fl- 
eers and crewmen to drop the cargo overboard, which they did 
— in about 20 fathoms of water. Marking the spot in triangular 
fashion with two land bearings he headed north to Italy. He 



142 



had reached La Spezia and reported his action to the German 
naval command. Rather than being commended for his fore- 
sight, he, along with three officers, was held for court-martial in 
the barracks of Massa, below La Spezia. The officers were shot 
and the seamen, judged as only carrying out orders, were sent 
off to the Russian front. 

For the next month, on instructions from La Spezia, the 
German naval command on Corsica searched for the heavy 
containers in the waters and soft sand off Bastia Bay. But on 
October 4, under Allied pressure, the Germans withdrew from 
the island, after blowing up the ancient, narrow stone bridges 
on the eastern end. Within two days the streets of Ajaccio, with 
its statue of Napoleon, were filled with men wearing the uni- 
forms of the United States, Britain, and the Free French. The 
bays of Ajaccio and Bastia filled with freighters, supply ships, 
tenders, gray destroyers, and troop transports. Inland, glades, 
meadows, rocks, and trees were bulldozed away to create an 
airfield, from which flew American and British fighter planes 
and DC-3 transports. 

The Unione Corse waited through this desecration with the 
traditional patience of a patriarchal crime family. When the 
hubbub was over, and all was serene again, the waters would be 
theirs and theirs alone to explore. Peace, of course, did come to 
Corsica, and divers of the Unione Corse tried and tried but 
failed to locate the looted treasure of North Africa. Occasion- 
ally, venturesome strangers would arrive to explore, having heard 
rumors of Nazi booty. In one way or another, all were discour- 
aged. Four disappeared one night. An Andre Mattei was found 
dead, riddled with bullets, after he had had too much to say 
about the location of the six containers. Then appeared Peter 
Fleig, one of the German sailors of the original E-boat, who had 
helped shove the containers into the water that night back in 
September 1943. He had survived the war in Russia, spent a 
year or so in a military hospital recovering from wounds, and 
then made it to Corsica. The vision that had sustained him 
through Russia and convalescence was that of finding again this 
wealth. While diving for it he was warned off by the Unione 
Corse, a warning he paid no attention to. He vanished. 

This legend of World War II continues to attract the adven- 
turous. Even Edwin Link, American businessman and inventor 



143 



of the Link Trainer of World War II, who later pioneered 
underwater vehicles for oceanographic exploration, mounted an 
expedition in the spring of 1963 to search for the treasure that 
had been intended for Martin Bormann. Like the others, Link, 
too, failed. 

In the final days of any war, grabbing and looting are com- 
monplace. Martin Bormann, however, was wrapped up in the 
dispersal of several billion dollars in assets around the globe. 
He dwelled on control of the 750 corporations; he had utilized 
every known legal device to disguise their ownership and their 
patterns of operation: use of nominees, option agreements, pool 
agreements, endorsements in blank, escrow deposits, pledges, 
collateral loans, rights of first refusal, management contracts, 
service contracts, patent agreements, cartels, and withholding 
procedures. Detailed documents and other papers on each com- 
pany and on all money transferred from the Third Reich to 
outside subsidiaries of the German corporations participating in 
the flight capital program, had been maintained. As goals were 
achieved, the papers were deposited in Swiss banks. A copy of 
everything, including field reports, went to Bormann as part of 
the historic file that would be crated and trucked out of Berlin 
to Munich, flown to Spain, and then transshipped to the Bor- 
mann archives in South America. 

Hermann Goering, like Ernst Kaltenbrunner, got caught up 
in the looting frenzy of the waning days of the war. Art treasures 
were Goering's passion, and he had filled his mansion, Karinhall, 
with priceless specimens taken from national collections in al- 
most every city of the occupied world. As the Allied forces 
closed in on the Nazis, he had most of these stored in cool salt 
mines to protect them from bombs and the weather. He was 
shrewd enough to realize that such masters could be readily 
identified and returned to their rightful owners. He possessed 
several of the better paintings from the Rothschild collection in 
France. Almost certainly they would find their way back to 
Baron Rothschild. Still, he realized that certain art treasures not 
so easily identifiable have great economic value; if sold in a 
neutral country, they could provide a handsome source of for- 
eign exchange, providing one was able to collect it after the war. 

Goering instructed a friend in Holland, Alois Miedel, a Ger- 



144 



man art dealer who had become owner of the Goudstikker Gal- 
leries in Amsterdam after the occupation in 1940, to begin 
collecting works of art that could be readily turned into cash 
in Spain. Miedel began with excellent Dutch paintings, by 
early as well as by later great masters. Usually he paid for them 
in German marks that had been pumped into the Dutch, Bel- 
gian, and French currency systems-but on occasion with Dutch 
"occupation" guilders. He seized outright art belonging to Jew- 
ish owners. He took his first big shipment in a Luftwaffe plane 
to Bilbao, a free port in Spain. Among the valuable paintings 
he offered for sale were works by Rembrandt, Van Dyck, Ru- 
bens, Jan Steen, and Cranach. The Prado in Madrid offered 
2 million pesetas for one of these. They purchased others more 
cheaply, at prices ranging from 100,000 to 500,000 pesetas. Brit- 
ish and American diplomats in Madrid, who were likewise ama- 
teur collectors, identified ten in the Prado looted from Holland 
as belonging to the Goudstikker collection, one to the Van 
Oalst collection, and one to the Valkenburg collection. Even- 
tually, some were returned to their owners. The money paid to 
Alois Miedel was banked in an account jointly controlled by 
himself and Goering. 

Miedel was a very busy man during the last stage of the war, 
and for a time was the most important art dealer in Europe. 
He brought a shipment of art treasures from France, with 
Goering's assistance, and for their sale in Spain published a 
catalogue of 200 pictures. Art stolen from Italy was appearing 
in Stockholm and in the galleries of Geneva, Basel, and Zurich. 
The value of paintings and objects of art looted from Holland, 
Belgium, and France totaled over $1.5 billion. Holland alone 
accounted for 200 million guilders or $136 million. Aside from 
Hermann Goering, Joseph Goebbels and Joachim von Ribben- 
trop were recipients of stolen art. While Alois Miedel was 
Goering's personal art hunter, Dr. Hans Wendland in France 
and Andreas Hofer, a Berlin art dealer, were also extremely 
active in the business. 

In December 1944 the Spanish government issued an order 
for the arrest of Alois Miedel, but he had already been seized 
by the Maquis on the French side of the border. Miedel escaped, 
made his way back to Spain, then with German assistance d is- 
appeared. He showed up later in Buenos Aires, whence his funds 



145 



had been transferred, and to demonstrate that all art lovers were 
not in Spain, Sweden, or Switzerland, the paintings he had with 
foresight shipped to Buenos Aires were soon gracing many fine 
homes there. 

In London and Washington there was grave concern about 
the German flight capital. Officials of both Allied governments 
knew in a general way what was going on, but not until they 
had laboriously compiled a card index of 500,000 names of 
businessmen in both hemispheres, northern and southern, who 
were working for the Germans, did they realize the magnitude 
of the task ahead. This list showed only the tip of the iceberg; 
many, many people were willing to be profitably employed by 
the Germans. It was early 1945, and Bormann was moving for- 
ward full speed. The various departments of the two Allied 
governments — U.S. Department of State and Treasury Depart- 
ment, British Ministry of Economic Warfare, together with 
General Donovan's OSS and General Menzies' MT6 — realized 
only too well that they would have to come up with a substan- 
tial counteroffensive to checkmate Martin Bormann's economic 
blitzkrieg. Bormann's group was lean and mean, a prototype of 
what Admiral Turner in 1977 was to hope aloud that his CIA 
might one day become. 

Orvis A. Schmidt, director of Foreign Funds Control of the 
U.S. Treasury Department, shook his head when he described 
the German flight capital operation in 1945: 

"The network of trade, industrial, and cartel organizations 
has been streamlined and intermeshed, not only organizationally 
but also by what has been officially described as 'personnel 
union.' Legal authority to operate this organizational machinery 
has been vested in the concerns that have majority capacity in 
the key industries, such as those producing iron and steel, coal, 
and basic chemicals. These concerns have been deliberately 
welded together by exchanges of stock to the point where a 
handful of men can make policy and other decisions that affect 
us all." 

This highly developed control that blanketed Germany from 
top to bottom also functioned outside of the Third Reich and 
was a vital key to the success of the Bormann program. The 
great civil service bureaucracy within Germany never for a mo- 
ment doubted that there would be a German revival, and they 



146 



had been trained like those in industry to follow a pattern that 
would advance the interests of their country. In the first week 
of occupation by the Allies after the surrender, when Allied 
military government representatives went to the Ruhr factories, 
they were always met by handpicked Germans, frequently engi- 
neers, speaking English and prepared with credentials to prove 
their acquaintance with reputable citizens and corporations in 
the United States. They had already begun to rehabilitate the 
bombed factories. The destruction of I.G. Farben plants was 
relatively light. As German I.G. technicians streamed from the 
battlefronts back to their hometowns and went to work, it was 
estimated that production could reach 90 percent of capacity 
in three months, given adequate supplies of labor, fuel, power, 
and raw materials. War damage to the other industrial firms 
had also been greatly exaggerated by Allied wartime air intelli- 
gence. The amount of capacity knocked out by bombing and 
shelling was less than that which the Germans had built during 
the war, so that Germany found herself somewhat ahead of her 
prewar capacity. For a time the Allies threatened to dismantle 
heavy factories and ship them to neighboring countries. But 
they would have been useless additions, and this factor, together 
with a growing distrust of Russia by the American and British 
governments, produced a change in outlook. Germany, with 
SI. 5 billion from the Marshall Plan, would soon find herself 
with the same well-rounded industrial structure as before the 
war. 

But what really hexed officials in London and Washington, 
whose job it was to stop the flow of liquid assets out of Ger- 
many, was their inability to get a handle on the problem. Every- 
thing was moving too fast. At all key points this economic 
empire was staffed by reliable party men, who were also expert 
businessmen. They in turn guided and worked with the nationals 
of each neutral country, who could be counted on to follow the 
same pattern of contributing to the best interests of Germany 
and German business corporations. In the formerly occupied 
countries, when ownership of a corporation was turned over to 
an appointee it was a legal fact, but there was simultaneously 
the handshake and the oral understanding that within five years 
ownership would revert to the German. Bormann believed that 
five years was a sensible time limit. He knew from his own 



147 



intelligence sources that Russia would take over eleven nations 
along the eastern frontier, including the eastern part of Ger- 
many, and that this would disenchant the British and the 
Americans. This, and the truth that man's memory is short- 
lived, guaranteed an altered Allied attitude. 

But all this speculation was for the near future; Bormann 
dealt with the present from his offices in Hitler's headquarters. 
When he gave directions they were followed in Latin America. 
At the time Orvis A. Schmidt of the U.S. Treasury Department 
declared : 

"The great German combines were the spearheads of eco- 
nomic penetration in the other American republics. In the field 
of drugs and pharmaceuticals the Bayer, Merck, and Schering 
companies enjoyed a virtual monopoly. I.G. Farben subsidiaries 
had a firm hold on the dye and chemical market. German 
enterprises such as Tubos Mannesmann, Ferrostaal, A.E.G., and 
Siemens-Schuckert played a dominant role in the construction, 
electrical, and engineering fields. Shipping companies and, in 
some areas, German airlines, were well entrenched. In addition, 
other and newer pro-German firms were engaged in miscellane- 
ous types of business, some of which were partly or wholly 
owned by Germans and some of which were wholly owned by 
persons of German origin, who, without changing their inborn 
allegiance, had acquired citizenship in one of the American 
republics." 

The U.S. Treasury Department thought it might be possible 
to supersede these German firms with a replacement program 
of its own, in which local industry would be fostered, with U.S. 
corporations encouraged to expand into these markets. But the 
obstacles were too great. In some Latin American countries 
German capital represented a large segment of the total business 
investment and in some important industries there was nothing 
to replace such German corporations, which had been profit- 
making concerns for some years; the I.G. Farbens and Siemens. 
Part of the new corporate move to Latin America was repre- 
sented by Fritz Mandl, the armament manufacturer of the 
Ruhr, who invested heavily in an Argentine government pro- 
gram to expand its armaments industry. The two largest German 
firms, Thyssen Lametal, S.A., Industrial y Mercantil, and La 
Sociedad Tubos Mannesmann, received German financing un- 



148 



der the capital made available for export by Martin Bormann. 
They were also able to employ large numbers of German scien- 
tists and technicians who had been moved out of Germany in 
1944. There was also the important German insurance firm of 
El Fenix Sudamericano Cia. de Reaseguros, S.A., an affiliate of 
the Munich Reinsurance Company. All South American big 
business came to depend on El Fenix as the principal reinsurers 
of commerce and industry in Latin America. 

Not so important but curiously interesting was the establish- 
ment of the small textile firm of Denubio, with a capitalization 
of 2 million pesos in Argentina. In 1944, while serving as Ger- 
man army chief of staff in Berlin, General Heinz Guderian 
received permission from Reichsleiter Bormann to establish this 
firm in association with a partner, Count Galeazzo Ciano, Mus- 
solini's son-in-law and Italian foreign minister to the Third 
Reich. The granting of such permission also entitled the famed 
Panzer general to the use and transfer of Nazi state funds to 
Argentina for this corporate purpose. When Orvis A. Schmidt 
suggested that some Latin American business enterprises alter 
their management to exclude all Germans, the chief executive 
officer of such a company would frequently claim non-German 
ownership, which made it necessary for a U.S. Treasury team to 
trace laboriously the ownership through a maze of dummies and 
holding companies. There was also the feeling of the U.S. ad- 
ministration that to proceed fully with such an elimination 
program in Latin America was to open up the serious question 
of whether the United States had the constitutional authority 
to take such action. 

Recently in Washington, D.C., I spoke with two lawyers, 
both of whom had worked with Orvis A. Schmidt, now de- 
ceased. As the director of Foreign Funds Control of the U.S. 
Treasury Department during the latter part of the war, Schmidt 
was the U.S. official directly responsible for stopping the Ger- 
man flow of assets to safe havens; he had been in a position to 
destroy the Bormann intention of establishing economic strong- 
points from which German businessmen could launch their 
postwar commercial campaigns after the war. 

One of these lawyers was Elting Arnold. He told me that 
Foreign Funds Control had been the think tank for Henry 
Morgenthau, secretary of the treasury, and that it was composed 



149 



of brilliant young men dedicated to high principles and the 
freezing of enemy assets in wartime. Arnold described Schmidt 
as a "tenacious, observant man, a man of sincerity and great 
character. . . . He was large and barrel-chested, quiet-spoken but 
possessed of a sense of mission." Following World War II, 
Orvis Schmidt went to the International Bank for Reconstruct- 
ion, serving there until the time of his death. 

From the second attorney, John Pehle, I learned why Schmidt 
and Foreign Funds Control had been unable to stop the German 
program of flight capital to neutral nations. John Pehle, an 
urbane and distinguished looking man who is today counsel to 
the law firm of Morgan, Lewis, and Bockies, had been the orig- 
inal director of Foreign Funds Control in the U.S. Treasury 
Department, with Orvis Schmidt serving as his deputy director. 

Pehle said, "The main mission of Foreign Funds Control, 
which began on April 8, 1940, after Norway and Denmark were 
invaded, was to freeze the assets of these countries in the United 
States so they could not be used by the Third Reich. As other 
countries were occupied, our activities expanded until we had 
all assets of Germany, Japan, and all occupied countries frozen, 
which amounted to many billions of dollars. We also attempted 
to reach outside the United States to control the assets and 
trade of Germany and Japan by establishing, with Britain, a 
blacklist of firms and businessmen doing business with Ger- 
many. There were no computers in those days and we kept 
some 500,000 names on Rolodex files. It was cumbersome and 
slow." 

Mr. Pehle believes his department of several hundred did a 
fine job of controlling foreign assets in the United States. Of 
course, "there was always political pressure to free some com- 
pany or other from our strictures. The infamous IT&T deal in 
which they sold their telephone company in Romania to the 
Romanian government and were paid the $7 million in the 
U.S. which represented Romanian frozen currency, is a testi- 
mony to backstairs influence. However, I am glad to say it didn't 
happen again." 

Pehle described the U.S. Treasury Department as an inter- 
esting place to be. "We had bright men. Lend-Lease was con- 
ceived in the Treasury." 



150 



But perhaps Pehle put his finger on the reason why U.S. For- 
eign Funds Control was unable to interdict the German drive 
to move assets to neutral nations. 

"In 1944 emphasis in Washington shifted from overseas fiscal 
controls to assistance to Jewish war refugees. On presidential 
order I was made executive director of the War Refugee Board 
in January 1944. Orvis Schmidt became director of Foreign 
Funds Control. Some of the manpower he had was transferred, 
and while the Germans evidently were doing their best to avoid 
Allied seizure of assets, we were doing our best to extricate as 
many Jews as possible from Europe.', 

One project of Mr. Pehle's War Refugee Board was an order 
to rescue as many Jews as possible from Budapest. The U.S. 
board could not intervene directly and so it asked the Swedish 
government if it would send a Swedish representative to Hun- 
gary, where 900,000 Jews, the last large remaining Jewish popu- 
lation, awaited either extinction or rescue. Sweden agreed and 
dispatched Raoul Wallenberg, who traveled to Budapest with 
huge sums of U.S. Treasury money and Swedish diplomatic 
papers, which were to provide freedom of travel to Sweden for 
a subsequent stream of 90,000 Jewish refugees. But when Buda- 
pest fell to Soviet troops, Wallenberg became a prisoner of the 
Russians and was shipped to Moscow. 

Many believe that Wallenberg has spent the last thirty years 
in Soviet prisons. Russia has denied the capture and imprison- 
ment of Wallenberg. But the case remains open. In May of 
1980 the "Free Raoul Wallenberg Committee," largely com- 
posed of influential Swedish and American Jews, held an inter- 
national hearing in Stockholm to focus new attention on this 
case. They wanted to induce the Soviet Union to produce this 
man, whom Einstein recommended for the Nobel Peace Prize 
in 1949 for efforts in Budapest on behalf of Balkan Jews and the 
American War Refugee Board operating under the direction 
of John Pehle. 

The two objectives were diametrically opposed. Certainly in 
his power position Reichsleiter Martin Bormann from 1944 to 
the end of the war was moving with all possible speed to shift 
all moveable assets out of the greater Third Reich. He was 
untroubled by the humanitarian considerations holding Wash- 



151 



ington in their sway. For him it was a go-for-broke operation 
all the way. Even today, however, there are U.S. Treasury old- 
timers of World War II still not aware of the magnitude of the 
Bormann operation and of its success. Those who know, in 
Washington, in South America, and in the capitals of Europe, 
are locked together in a conspiracy of silence that has endured 
for thirty-seven years until the publication of this book. 

In this silent contest during the winddown years of World 
War II, Orvis A. Schmidt was not to emerge victor over Martin 
Bormann, although he tried. Tirelessly, he told assorted Senate 
committees what was happening, spoke of the extent of the 
German plan, and urged a new dedication to stopping the flight 
capital blitzkrieg, with the prescient warning, "It is these new 
concentrations of economic power which will enable Germany 
to rise again." 

Orvis A. Schmidt felt that he was a man crying in the wilder- 
ness as he gave testimony before Senate committees. The mood 
of the country and the marketplace was similar: get our boys 
home and get on with the business of making money and build- 
ing new homes and stabilizing the economy for the bumper 
crop of babies which was sure to come. When Orvis Schmidt 
told the Senators the extent of German economic infiltration 
into the foreign countries even before VE-day and that the 
Germans intended to preserve this vast hidden economic struc- 
ture in order to rise again, he knew instinctively that he had 
failed to catch the interest of the American lawmakers. Schmidt 
testified: 

The danger does not lie so much in the fact that the German indus- 
trial giants have honeycombed the neutrals, Turkey and Argentina, 
with branches and affiliates which know how to subvert their com- 
mercial interests to the espionage and sabotage demands of their 
government. It is important and dangerous, however, that many of 
these branches, subsidiaries, and affiliates in the neutrals and much 
of the cash, securities, patents, contracts and so forth, are ostensibly 
owned through the medium of secret numbered accounts or rubric 
accounts, trusts, loans, holding companies, bearer shares, and the 
like by dummy persons and companies claiming neutral nationality 
and all of the alleged protection and privileges arising from such 
identities. The real problem is to break the veil of secrecy and 



152 



reach and eliminate the German ability to finance another world 
war. We must render useless the devices and cloaks which have 
been employed to hide German assets. 

Schmidt noted the facts that A.E.G. had six subsidiaries in 
Argentina, one in Portugal, two in Spain, three in Sweden; 
Siemen-Schuckert-Werke A.G. with seven subsidiaries in Ar- 
gentina, two each in Portugal and Sweden, four in Spain, and 
five in Switzerland, and that Vereinigte Stahlwerke had seven 
subsidiaries in Argentina, three affiliates in Spain, and four in 
Sweden — and so on almost ad infinitum. He was to save per- 
haps his best shot for I.G. Farben when he testified before a 
U.S. Senate committee: 

"We have found an I.G. Farben list of its own companies 
abroad and at home-a secret list hitherto unknown — which 
names over 700 companies in which I.G. Farben has an inter- 
est," and this did not include their regular corporate structure 
in 93 countries or the 750 companies established under the 
Martin Bormann program. 

He also recited the discovery of his former chief, John Pehle, 
now directing the War Refugee Board at the request of Presi- 
dent Roosevelt. I.G. Farben, at the insistence of Himmler and 
for related political reasons, had built a vast industrial estab- 
lishment at Auschwitz to manufacture synthetic oil and rubber. 
Himmler promised Farben officials an unending supply of Jews 
in the 300,000 population concentration camp to work I.G. 
Farben Auschwitz. But even Friedrich Flick and other Ruhr 
industrialists who were themselves utilizing supplies of slave 
labor in their factories to the west knew production could only 
be maintained with well-fed workers, not emaciated, walking 
skeletons as at Auschwitz. It was I.G. Farben's greatest failure. 
Despite a plant which used more electricity than the city of 
Berlin, an investment of 900 million Reichsmarks, and 25,000 
inmates who were worked until they dropped dead, not a single 
pound of Buna rubber was ever produced. It was the last time 
that political considerations would influence business judgment 
in the establishment of a factory, decreed the I.G. Farben board 
of directors. 



153 



Orvis Schmidt also testified that when they questioned the 
top Farben people about their wartime activities, 

. . . They were inclined to be very indignant. Their general attitude 
and expectations was that the war was over and we ought now to 
be assisting them in helping to get I.G. Farben and German industry 
back on its feet. Some of them have outwardly said that this ques- 
tioning and investigation was, in their estimation, only a phenomenon 
of short duration, because as soon as things got a little settled they 
would expect their friends in the United States and England to be 
coming over. Their friends, so they said, would put a stop to 
activities such as these investigations and would see that they got 
the treatment which they regarded as proper and that assistance 
would be given to them to help reestablish their industry. 

As the war came to a close, all major American industries 
felt that they would like to see the German money machine 
working again. Every U.S. company of consequence had its 
representative in uniform, as technical advisor or officer, as did 
the British. As Allied armies moved through France, Belgium, 
and the Lowlands, corporate executives took time out to check 
the status of their branch firms. The changing tone seemed 
auspicious to Martin Bormann. 

In all lands liberated by American and British armies, there 
was a reluctance to disturb the machinery of money and indus- 
try that had been shaped by German economic experts into 
cartels and interlocking business arrangements with German 
firms. The obvious inequities and seizures were adjusted. The 
paintings taken from the Rothschilds were returned, as was the 
family bank. Firms and newspapers that had been too blatantly 
Nazi changed hands or were closed down. The German presence 
was reduced, but not eliminated; the device of cloaked owner- 
ship insured a continuation of proprietory rights. It all added 
up to a new chapter in the adventures of the U.S. Army investi- 
gative teams. Grim idealists when they entered the liberated 
countries, they soon learned that, once free, each government 
haughtily insisted on making its own decisions without advice 
from the Americans. 

Even Grand Duchess Charlotte of Luxembourg had her own 
ideas, and they didn't jibe with those of the U.S. investigative 
team dispatched to her tiny country to set things right. Upon 



154 



her return from exile in London and Montreal, she promptly 
dismissed the U.S. investigative mission, which had been at- 
tempting to uncover secrets of the German-Luxembourg steel 
cartel. Elbert D. Thomas of Utah, when he was chairman of the 
U.S. Senate subcommittee on military affairs, commented in 
Washington on June 26, 1945: 

We had a mission in Luxembourg which was obtaining quite a bit 
of information on the steel cartel until the Grand Duchess returned. 
Information was then blocked off from us and the mission had to 
retire with what information they had already collected. There was 
much to learn about the way in which small states like Luxembourg 
had been used by the cartels. The episode suggests that some rulers, 
whom we have befriended, may be expected to assist the cartelists in 
their postwar efforts to regain dominance. 

What the grand duchess learned from her finance minister on 
her return to Luxembourg was simple: "Don't tamper with the 
money machine. We made record profits during the German 
era, and there is every indication we will be going into an even 
greater period of prosperity, once Germany recovers. They will 
then continue to be our biggest customer. All that is required 
now is a readjustment in stock ownership to please Belgian, 
French, British, and American shareholders, which will be 
done." Open German stock ownership was reduced to its former 
position of about 20 percent in Luxembourg industry and the 
German trustee was eliminated. But at board meetings, Belgian 
and French banks voted as blocs on behalf of stockholders in 
Germany. The German voice in the wings was still there, and as 
time went on in Luxembourg, increasingly the voice could be 
heard loud and clear-the customer speaking to the seller, the 
equalizer of the marketplace. Grand Duchess Charlotte, who 
was to retire during the sixties to be succeeded by her son, Grand 
Duke Jean, always believed that the new prosperity of Luxem- 
bourg after the war was testimony to her decision in 1945 not to 
permit interference with the German financial and industrial ap- 
paratus. The German banks, Deutsche and Dresdner, remained 
in position and the Luxembourg financial community continued 
to look to Frankfurt rather than to Zurich, London, and New 
York for financial guidance. ARBED (its sales organization in 
New York City is Amerlux Products) continues as a powerful 



155 



and prosperous steel cartel closely tied to its German mentors. 
By 1980 Luxembourg was to become a new center for gold buy- 
ing in Europe, with West German banks selling the equivalent 
of $1.4 billion in gold to holders in Luxembourg. The chief 
attraction was the lack of a value-added tax, a form of sales 
tax. The tiny principality also became the European finance 
center for the KGB and its espionage operations on the con- 
tinent. 

But on February 25, 1946, Russell A. Nixon, when acting 
director, Division of Investigation of Cartels and External Assets 
in the U.S. military government in Germany, was to sum up the 
entire problem facing those investigative teams in their efforts 
to check and change the economic web woven to confuse the 
Allies. He was to tell a Senate subcommittee in Washington: 

We have not yet, nine months after the war has ended, developed 
an effective drive for these assets. If you will go through the neutral 
countries, country by country, you will find that they have not 
accepted the sovereignty of the four powers in getting the assets. 
They are not turning the assets over. Such progress as we have made 
has been very partial and generally ineffective. Generally speaking, 
in spite of the efforts that have been made, at the present time 
there is a continuation of the dissipation and further concealment 
of these assets throughout all the neutral countries. 

Powerful friends of the Bormann organization in all Western 
countries, including those sprinkled in control points through- 
out the administration in Washington and in the financial and 
brokerage businesses of Wall Street, the City of London, and 
the Paris establishment, did not wish a coordinated drive to get 
at these external German assets. They had understandable rea- 
sons, if you overlook morality: the financial benefits for coop- 
eration (collaboration had become an old-hat term with the war 
winding down) were very enticing, depending on one's im- 
portance and ability to be of service to the organization and the 
750 corporations they were secretly manipulating, to say nothing 
of the known multinationals such as I.G. Farben, Thyssen A.G., 
and Siemens; and, as a second reason, the philosophy of free 
enterprise and preservation of private property. 

This latter reason was expressed best at an appeals board 
hearing in the American Zone of Germany. The board was to 



156 



vote four-to-one in late 1945 to release from prison Richard 
Freudenberg, the largest leather and shoe manufacturer in Ger- 
many. In 1944 his personal income for the year was one million 
marks. Freudenberg was also a war economy leader and a re- 
gional economic advisor to Reichsleiter Bormann. He had been 
jailed as an active Nazi under the mandatory arrest category 
regulation, and the vote to release him also permitted him to 
return to management of his company. The argument for free- 
dom, which was to become a landmark for occupation authori- 
ties, was expressed by Mr. Reinhard, representing Ambassador 
Robert Murphy: 

"What-we are doing here through denazification is nothing 
less than a social revolution. If the Russians want to Bolshevize 
their side of the Elbe that is their business, but it is not in con- 
formity with American standards to cut away the basis of private 
property. This man is an extremely capable industrialist, a kind 
of Henry Ford." 

It was fated that Hermann Schmitz and Martin Bormann 
should meet again and discuss the progress of the flight capital 
program. It took place at the chancellery in Berlin in March 
1945. The Wehrmacht was fighting inside Germany, hard 
pressed by General Patton's U.S. Third Army. In the east, Ger- 
man defenses still held in Upper Silesia, Czechoslovakia, and 
Danzig. But Russian pressure was increasing. In the chancellery 
it was quiet, with only the noise of typewriters and teletype 
machines in outer offices as Schmitz and Bormann talked. 

In testimony later given to Nuremberg investigators, Schmitz 
praised Bormann for the way he had directed the distribution 
of German assets around the world. His own Farben organiza- 
tion had, of course, contributed to the success of the operation. 
Every regional representative working for Hermann Schmitz was 
an exceptional businessman, or he would not have been with 
I.G. All had contributed sound advice in their areas of com- 
petence, the regions of the world where they represented Farben 
while keeping an eye on the subsidiaries of the parent concern 
and the 700 hidden corporations they controlled. They had 
provided assistance and continuing guidance in establishing the 
750 new companies created on order of Bormann, who wanted 
more than hidden assets; Bormann wanted the money and 
patents and technicians put to work to create even greater assets 



157 



that would bolster Germany in the postwar years. In their meet- 
ing in the chancellery, both men checked over the figures of 
sums disbursed, and they were accurate to the pfennig. The 
Reicshsleiter asked Schmitz his views of the future. Schmitz 
replied, "The occupation armies will be understanding in the 
West, but certainly not in the East. I have instructed all Farben 
administrators and technicians to come to the West, where they 
can be of use in resuming our operations once the disturbances 
of 1945 come to a halt." 

Schmitz added that, while general bomb damage to the I.G. 
plants was about 25 percent of capacity, some were untouched. 
He mentioned speaking with Field Marshal Model, who was 
commanding the defenses of the Ruhr. "Model had planned to 
turn our Bayer-Leberkusen pharmaceutical factory into an artil- 
lery base but he agreed to make it an open, undefended factory. 
Hopefully, we will get it back untouched." 

What about your board of directors and the essential execu- 
tives? If they are held by the occupation authorities can I.G. 
continue?" Bormann asked. 

We can continue. We have an operational plan for such a 
contingency, which everyone understands. However, I don't be- 
lieve our board members will be detained too long. Nor will I. 
But we must go through a procedure of investigation before 
release, so I have been told by our N.W.7 people who have 
excellent contacts in Washington." 

This was not quite an accurate assessment of the immediate 
future that faced Schmitz and I.G. Farben in Germany. Twelve 
officers of I.G. were to be tried at Nuremberg, and on July 30, 
1948, they were sentenced to various prison terms for plunder 
of occupied territories and use of slave labor in their factories. 
Schmitz was to receive a four-year prison term, but many of the 
lesser officials would be released by the Allied military govern- 
ment, which simply didn't know what to do with them. Of those 
at the second level of management, there was Paul Denker, 
director of Farben's accounting divisions and important in the 
various Farben subsidiaries; Carl von Heider, general director 
of sales of dyestuffs, who also handled the Czechoslovakia opera- 
tion; Helmuth Borgwardt, general director of sales of organic 
chemicals; Guenther Frank- Fable, chief of the central finance 
office and director of Max Ilgner's espionage group; N.W.7's 



158 



Kurt Kruger, another Ilgner lieutenant; Herbert Stein, chief 
legal advisor of the chemical and dyestuffs department and 
corporate camouflage expert second only to Schmitz himself. 
All were returned to their corporate offices. 

Schmitz also told Bormann of his visit to Switzerland earlier 
in the month. "Germany will have a poor image problem this 
time. Much worse than after the First World War. It can all be 
placed on the doorsteps of Goering, Himmler, and Heydrich. 
Goering and Himmler thought up the Final Solution for the 
Jews, and Heydrich made it a fact." 

Bormann agreed, asking, "How does that affect I.G.?" 

"We produced the poison gas on Himmler's orders," Schmitz 
explained, "so I've been making some corporate name changes 
in Basel, which may help our overseas situation." 

Hermann Schmitz then went on to explain that he had 
changed I.G. Chemie to Societe Internationale pour Participa- 
tions Industrielles et Commerciales SA. In German-speaking 
Basel, the name became International Industrie und Handels- 
beteiligungen A.G., or Interhandel. Schmitz said he had stipu- 
lated that only Swiss were to be on the board of directors of the 
new holding corporation, which could then declare itself a fully 
Swiss corporation. The brightest jewel in the Interhandel string 
of companies was General Aniline and Film Corporation, a 
holding company in the United States for various American 
I.G. Farben companies. It had been organized in 1929. There 
were ten members of the board: Schmitz, Bosch, and Greif, all 
Farben men; Metz, Weiss, and Kitroff, of U.S. companies that 
sold Farben manufactured products; and four prominent Amer- 
ican industrialists and bankers -Mitchell, Ford, Warburg, and 
Teagle of Standard Oil. In one instance Farben gained a large 
bloc of Standard Oil stock by selling certain patents to the 
Standard Oil Corporation. Some American directors of General 
Aniline had large blocs of GAF stocks registered in their name. 
The New York bank of record was National City Bank, the 
largest in New York, which is now known as Citibank. In 1929 
the board voted Hermann Schmitz president, a position in 
which he served from 1929 to 1936, while simultaneously serv- 
ing as head of I.G. Farben. In March 1945, Hermann Schmitz 
was telling Martin Bormann that he hoped this shuffling of 
name and board membership would prove helpful after the war 



159 



when steps would be taken to return General Aniline and Film 
Corporation to his ownership in Switzerland. The valuable 
holding company had been seized in 1942 by U.S. authorities 
as suspected enemy assets. 

In 1948 a suit was to be filed by certain minority stockholders 
of Interhandel against the attorney general of the United States, 
as successor to the wartime Alien Property Custodian, and the 
U.S. Treasury, for the return of 89 percent of GAF, of a value 
of $100 million plus SI. 8 million seized in cash in 1942. Inter- 
handel, through its American attorneys, first filed an adminis- 
trative claim, which was denied. The suit then went to the 
District Court for the District of Columbia, then to the Supreme 
Court, and back to District Court. The Swiss claim was based 
on the argument that Interhandel was a Swiss corporation, that 
it was not nor had it ever been an enemy of the United States, 
and that it owned the shares in question. The American govern- 
ment rebuttal was that Interhandel was the result of a conspir- 
acy between the private bank of H. Sturzenegger, formerly E. 
Greutert &Cie., and I.G. Farbenindustrie of Germany and 
others "to conceal, camouflage, and cloak the ownership, con- 
trol, and combination by I.G. Farben of properties and interests 
in many countries of the world, including the U.S." 

As the case dragged through the U.S. courts, Schmitz would 
have Interhandel cosmeticized even more. Charles de Loes, past 
president of the Swiss Bankers Association, would be elected 
chairman, and the general manager of each of the Big Three 
banks would be appointed to the board. They would agree to 
this because the honor of Swiss banking and its principle of 
banking secrecy would be at stake. In addition, 25 percent of 
Interhandel stock would be registered in the name of Union 
Bank, whose manager, Dr. Alfred Schaefer, was of known in- 
tegrity. The Swiss believed the association of such a man of 
high banking repute at Interhandel would impress American 
government authorities. But the German connection would still 
be there. Not only Hermann Schmitz, but also the banking 
connection of Union Bank of Switzerland, Dr. Schaefer's bank, 
and Deutsche Bank, which acted in concert on so many deals 
involving not only I.G. Farben but also big Ruhr industrialists 
such as Thyssen A.G., the largest steelmaker in Germany. In 
January 1978 these two lead banks, acting through the UBS-DB 



160 



Corporation, an American firm of the Union Bank of Switzer- 
land and the Deutsche Bank of Germany, would be the financial 
advisors for Thyssen A.G. in its $275 million cash takeover of 
the Budd Company of Troy, Michigan, a leading U.S. manu- 
facturer of auto components, truck trailers, and rail cars. UBS- 
DB Corporation would also say that the West German 
companies it represented were showing a "very substantial inter- 
est in all sorts of American ventures, including mergers and 
acquisition." 

Bayer A.G., another of Schmitz's divisions in I.G. Farben, 
would continue to grow, in 1977 buying Miles Laboratories, a 
U.S. corporation, maker of Alka Seltzer, for $261 million; 
Daimler-Benz acquired Euclid, Inc., and Siemens bought 50 
percent of Allis-Chalmers electrical equipment operations. 

The General Aniline and Film suit would finally be settled 
by Attorney General Robert Kennedy in 1965. The company 
had been under government ownership and American manage- 
ment for twenty-three years and had always turned a handsome 
profit. Under private ownership it could do better, and although 
an entire generation of lawyers, bankers, and politicians who 
had profited from GAF would cease making big money from 
their involvement, the attorney general felt it was best for the 
government to divest itself. The war was long over, and few 
people cared about its Nazi connections. 

As a result of this decision, General Aniline and Film would 
be sold at public auction. It was to be the biggest competitive 
auction in Wall Street history, and an underwriting syndicate 
headed by First Boston Corporation and Blyth & Company 
would win out over Lehmann Brothers. The total sales price, 
$329,141,926.49. The U.S. War Claims Fund would receive 
$189.2 million, plus $17.5 million in back taxes. Through its 
Swiss bank connections, $120.9 million would be distributed to 
Interhandel stockholders. 

For the aging Hermann Schmitz it had been a good run. A 
gigantic settlement for General Aniline and his coshareholders 
would have capped his remarkable career; however, before the 
General Aniline suit was settled by Attorney General Kennedy, 
Schmitz died. 

Back in March 1945 when he was confiding in Martin Bor- 
mann, who was also doing some heavy planning, there was 



161 



always the unknown — What now? Schmitz foresaw himself 
testifying before victorious American occupation authorities, 
perhaps, ruefully, spending some time in prison, and then back 
to I.G. Farben, to resume his plans to make this vast industrial 
apparatus more prosperous than ever. 

For Martin Bormann time was of the essence, and he had 
planned his escape with great care. He would, loyally, remain 
with Adolf Hitler till the end of the war, then he and the 
Fuehrer would make their way to South America. But on April 
27 Hitler's choice was to expire in the Fuehrerbunker with his 
devoted Eva. Bormann finalized his own plans for an escape 
design, one worthy of the man who had directed the greatest 
financial disappearing act in history. From that time on the 
world has speculated, What really became of Martin Bormann"? 



162 



EIGHT MONTHS AFTER BORMANN'S CANNY DIREC- 
tives of the Strasbourg conference were put into operation be- 
hind the scenes, and in line with his prophetic foresight, 
Germany's Western Front collapsed. The bitterly defended 
Rhine had been crossed at Remagen Bridge in early March; 
shortly, the main Allied battle force swarmed over a broad 
front at Wesel supported by artillery fire from 2,000 guns and 
by airborne landings by the American 17th and the British 6th 
divisions. I stood in the open bay of a Dakota that was hauling 
gliders laden with soldiers; I recorded history for broadcast later 
that day from Paris to New York and on to the network. A 
friend, Joseph Fountain, heard the broadcast on his car radio 
as he drove north on Riverside Drive in New York, and he 
wrote me, "It was so clear I could even hear the shrapnel hitting 
the side of your airplane." 

General Patton's U.S. Third Army entered Frankfurt, racing 
eastward until ordered by General Eisenhower to stop at the 
Elbe River. Prime Minister Churchill was urging that the push 
go on, for he wanted Allied armored divisions in Berlin before 
the Russians got there, for compelling political reasons. The 
German capital symbolized all of Germany, and in a message 
to Eisenhower the British prime minister said, "I deem it highly 
important we should shake hands with the Russians as far to 
the east as possible." General Patton was likewise pressuring 



165 



Eisenhower to let him run again at the Elbe, where his com- 
mand caravan was parked with the restless G.I.s of the Third 
Army. Patton was confident he could make it to Berlin, Vienna, 
or even Prague before the Red Army. Stalin, however, was 
demanding as his prize the city of Berlin, and Roosevelt, in 
failing health and unable to contend with the driving insistence 
of the Soviet leader, again acquiesced, as he had on too many 
issues at Yalta, where he gave away more than he should have. 
With Berlin assured, Stalin was positioned advantageously, em- 
boldened to wage the cold war that was to follow his seizure of 
eleven victim countries swept into the Soviet bloc. 

For days Prime Minister Churchill had tried to reach Presi- 
dent Roosevelt to dissuade him from halting American troops 
at the Elbe. The replies to him were all issued by General 
Marshall, an indication, Churchill realized, that the president 
was dying. Much earlier in London, upon his return from the 
Yalta Conference, Mr. Churchill had expressed privately the 
opinion that he would never again see the president alive, re- 
marking that Roosevelt at Yalta was "sallow, wan, dispirited; 
the problems of command and war had taken their toll of his 
body." When the news of Roosevelt's death crackled over the 
Berlin radio, Josef Goebbels, the wily intellectual of Hitler's 
inner circle, had just returned by motor car from the Eastern 
Front. The city was suffering bombardment, and the Adlon 
Hotel was burning. As he mounted the steps of the Propaganda 
Ministry, a German reporter said to him, "Herr Reichsminister, 
Roosevelt is dead." Goebbels stood transfixed, then invited the 
reporter inside for some champagne. Speaking on his private 
line to the Fuehrerbunker beneath the Chancellery building, 
Goebbels informed Hitler: "My Fuehrer, I congratulate you! 
Roosevelt is dead. It is written in the stars that the second half 
of April will be the turning point for us. This is Friday, April 
the 13th. It is the turning point!" Hitler made a reply to Goeb- 
bels, and when the propaganda minister had replaced the tele- 
phone in its cradle, he was ecstatic. 

It is not strictly true that Hitler and Goebbels believed in 
astrology, but several Nazi leaders such as Himmler did; this was 
tolerated and served to amuse the Fuehrer. Goebbels would 
employ astrology or any device he could think of to cheer up 



166 



his leader. As he remarked after the telephone call, "Crazy times 
call for crazy measures." 

In the last week before Berlin's fall to Marshal Zhukov's Red 
Army, a Wagnerian denouement was taking place fifty feet 
below the Chancellery, in the Fuehrerbunker. The notables who 
had ridden the crest of National Socialism for twelve years had 
deserted Hitler, save for his two trusted aides, Martin Bormann 
and Josef Goebbels. 

Hermann Goering had fled with his retainers to Obersalzberg, 
where in the temporary safety of his chalet he could gaze over 
to Berchtesgaden on a nearby mountaintop. Goering, the 
Reichsmarshal, had failed the Luftwaffe by indifferent lead- 
ership; Goering, originator of the Gestapo and the concentration 
camp system, on July 31, 1941, in agreement with Himmler, 
had written to Reinhard Heydrich, "I hereby charge you with 
making all necessary preparations for bringing about a complete 
solution of the Jewish question in the German sphere of influ- 
ence in Europe." From that directive grew the chilling specta- 
cles of Auschwitz, Dachau, and the other terminal camps. Goer- 
ing had taken Hitler at his word in 1941 that the war was 
won, and had thereafter lived as a sybarite, with a life style 
resembling that of an oriental potentate, complete with flowing 
robes, painted toenails, and jewel-encrusted martial batons. 

Heinrich Himmler departed the Fuehrerbunker, never to show 
up again, following a depressing staff conference and birthday 
party for Hitler on April 20. He reached his headquarters at 
Ziethen castle the next day and there fantasized about succeed- 
ing Hitler following the collapse of the Third Reich. Interwoven 
in his thoughts was the idea of a meeting with General Eisen- 
hower to plan a new Germany. "Should I bow to him, or 
should I shake hands?" was a question he posed to SS General 
Schellenberg, who was to flee to Sweden in the last week of the 
war. Schellenberg would later turn himself in to SHAEF, where 
he would become a prisoner of war, write his memoirs (with the 
help of two journalists), which would lack credibility, and then 
die in 1952. Himmler, the ogre who dispassionately ordered the 
death of entire races, Jews and Slavs, could never endure the 
sight of death. 

Grand Admiral Doenitz, commander of the U-boat forces, 



167 



retired to Flensburg on the German-Danish border, where he 
would represent the machinery of Nazi government after Hitler's 
suicide, and arrange for the unconditional surrender of all Ger- 
man armed forces at Rheims, France, on May 7, 1945. He died 
on January 6, 1981, in his home at Kiel, honored by 2,500 vet- 
erans, some with Knight's Crosses tied with red and black 
ribbons around their necks, but unhonored by officials of the 
Federal Republic in Bonn, fearful of any impetus to neo- 
Nazism. 

Albert Speer, the dedicated technocrat who built highways 
and bridges and stately buildings for Hitler, had served as min- 
ister of armaments and war production. He disdained others of 
the inner circle, and had for years been a foe of Martin 
Bormann. When Speer departed the Fuehrerbunker for the 
last time on April 24, after confessing to Hitler the steps he had 
taken to countermand the Fuehrer's order for a scorched-earth 
policy in Germany, and was agreeably surprised at not being 
hauled out by guards and shot in the garden, he flew out of 
Berlin and went first to Himmler, then proceeded to Schleswig- 
Holstein, where he joined Doenitz at Flensburg. 

Both Goering and Himmler were stripped of power during 
the last week. The former, heir apparent since 1941, had sent 
an injudicious telegram to Hitler asking confirmation of his 
status as successor, and giving a deadline for the reply. Bormann 
observed to Hitler that the Reichsmarshal was usurping the 
Fuehrer's power, pointing to the deadline phrase as evidence. 
Hitler erupted and ordered Bormann to draft a teletype reply. 
It stated that Goering had committed high treason, for which 
the penalty was death This would not apply if Goering resigned 
from all his offices. Bormann also sent a teletype to the SS in 
Obersalzberg, ordering the arrest of Goering for high treason. It 
was announced in Berlin that Goering had resigned all his offi- 
ces, for reasons of health. 

Heinrich Himmler's dream that he would be designated 
Fuehrer after Hitler's death was shattered when the news came 
that he had been removed as successor via Hitler's last will and 
testament. Himmler had been conducting personal peace nego- 
tiations with Count Bernadotte of Sweden as intermediary with 
the Allies, also promising Hitler's body to the West, and news 
of this was reason aplenty for Hitler to eliminate the SS leader 



168 



as his intended successor. A conference took place the night of 
April 28-29 in the Fuehrerbunker, attended only by Hitler, 
Bormann, and Goebbels. The last will and testament was 
drafted, and referring to Himmler reads: "Before my death I 
expel from the Party and from all his offices the former Reichs- 
fuehrer SS and Reich Minister of the Interior, Heinrich Him- 
mler." 

Adolf Hitler's private will was a simple document: 

Since I did not think I should take the responsibility of entering 
into marriage during the years of combat, I have decided now 
before termination of life on this earth, to marry the woman who, 
after many years of true friendship, entered voluntarily into this 
already almost besieged city, to share my fate. She goes to death 
with me as my wife, according to her own desire. Death will replace 
for us that of which my work in the service of my people robbed us. 

What I own belongs — as far as it is of any value at all — to the 
Party. Should the Party no longer exist, it will belong to the state. 
Should the state also be destroyed, any further decision from me 
is no longer necessary. 

The paintings in the collections which I have bought during the 
years have never been acquired for private purposes, but always 
exclusively for the creation of an art gallery in my native town of 
Linz a.d. Donau. 

It is my heartfelt desire that this legacy shall be fulfilled. 

My most faithful party member, Martin Bormann, shall be the 
executor of this testament. He is authorized to make all decisions 
to be final and legal. He is permitted to take everything which 
either has personal souvenir value or which is necessary for the 
maintenance of a small bourgeois household and give it to my 
brothers and sisters, and especially to the mother of my wife and 
my faithful co-workers who all are well known to him. There are 
most of all my old secretaries, Mrs. Winter, etc., who for many 
years gave me loyal cooperation. 

I and my wife choose death to escape the disgrace of being forced 
to resign or to surrender. It is our wish to be cremated immediately 
at the place where I have done the greatest part of my work during 
the twelve years of service for my people. 

The will was signed on April 29, 1945, by Adolf Hitler, wit- 
nessed by Martin Bormann, Dr. Goebbels, and Nicolaus von 
Below, Hitler's air force adjutant. 



169 



His political testament was an expression in greater detail of 
work done for Germany and the German people. He lays blame 
for the war "on those international statesmen who were either 
of Jewish origin or who worked in the Jewish interest." There 
exists nowhere in the official records even a scrap of paper attest- 
ing to the fact that Hitler caused the creation of death camps 
for Jews and others. But one significant speech, made on Janu- 
ary 30, 1939, and directed at President Roosevelt, who was giv- 
ing every indication of supporting a war against Germany, 
outlined the course Hitler planned for the future. 

"Today I will once more be a prophet. If the international 
Jewish financiers inside and outside Europe should again suc- 
ceed in plunging the nations into a world war, the result will not 
be the bolshevization of the earth and the victory of Jewry, 
but the annihilation of the Jewish race throughout Europe." 
This, in 1939. 

In his political testament, signed in Berlin on April 29, 1945, 
Hitler returns again to this same theme, arguing that death camps 
for Jews were more humane than death under bombardment. 

I left no doubt that it would not be tolerated this time, that 
millions of European children of the Aryan people should starve to 
death, that millions of grown-up men should suffer death, and that 
hundreds of thousands of women and children should be burnt and 
bombed to death in the cities, without the real culprit suffering 
his due punishment, even though through more humane methods. 

Swayed by a philosophy thus expressed and repeated many 
times over, Goering, Hitler's decreed successor at that time, 
ordered Reinhard Heydrich to "make all necessary preparations 
for bringing about a complete solution of the Jewish question 
in the German sphere of influence in Europe." 

Hitler then completed the second part of his political testa- 
ment, which was to expel former Reichsmarshal Hermann Goer- 
ing from the party, in his place appointing Grand Admiral 
Doenitz as president of the Reich and as supreme commander 
of the armed forces. He also expelled Heinrich Himmler and 
appointed Gauleiter Karl Hanke as Reichsleiter of the SS and 
chief of the German police, and Gauleiter Paul Geisler as 
Reichsminister of the interior. 

Martin Bormann had finally won out over Goering and Him- 



170 



mler; Dr. Goebbels, who was made Reichschancellor, would 
also be shortly gone, in a suicide pact with his wife, shot on his 
orders by an SS guard, and with their six children quietly put to 
death by injections administered by a physician. 

The newly created Party Minister Bormann then sent copies 
of all these documents by special courier to Doenitz. He com- 
posed the covering letter as follows: 

Dear Grand Admiral! 

Since all our divisions failed to appear our situation seems to be 
beyond hope. The Fuehrer dictated last night the attached political 
testament. Heil Hitler! 

Yours, (signed) Bormann 

With the last will and testament drawn up and signed and a 
ceremony of marriage between Hitler and Eva Braun performed 
before Walter Wagner, city councilor and registrar of Berlin, 

Eva Braun from force of habit signed her name Eva B , 

scratched out the "B," and completed the signature as "Eva 
Hitler." Those present in the chancellery bunker knew it was 
time for the climactic scene, for the death of the Hitlers. There 
was, however, first a champagne breakfast for senior officials, 
and following that the usual morning staff conference. It was 
estimated that the Russians would overrun the bunker by 
May 1. A nearby bridge was being defended by youngsters of 
the Hitler Youth, and heavy fighting elsewhere was by SS units 
largely composed of Ukrainians, Romanians, Bulgarians, Hun- 
garians, and Croats, long ago joined with the Nazis, who had 
reasoned that it was better to die in battle than in a Russian 
slave camp. The last airplane to depart from Berlin had landed 
on April 28, flown by a sergeant pilot of the Luftwaffe who 
had circled down from 13,000 feet and rolled to a stop on the 
east-west axis roadway leading past the Tiergarten and the 
chancellery. It was there to fly to safety Ritter von Greim, much 
decorated fighter pilot and new field marshal of the Luftwaffe, 
who had replaced Goering, and Hanna Reitsch, the lauded 
woman test pilot. On Hitler's orders, Greim was to leave this 
night and, once secure at Luftwaffe headquarters, was to mount 
an attack on Russian positions in Berlin. They took off after 
midnight, and as the Arado 96 aircraft climbed it was tossed 



171 



about by exploding shells. Leveling out of reach of the fire, they 
could see the city being consumed far below, and they headed 
for Ploen and German command headquarters, where both 
von Greim and Reitsch met with Grand Admiral Doenitz. 

On this same night an officer courier also left by ground route 
with a special message for Field Marshal Keitel at Combined 
General Staff Headquarters at Ploen: he carried Hitler's vale- 
dictory to the German armed forces. The remainder of April 29 
was taken up with brief farewells to staff members. In the early 
morning of the next day, Hitler, on Bormann's arm, left his 
office to bid goodbye to twenty women of the staff. Then he 
retired to his quarters and at 3:30 A.M. a single shot was heard. 
Those who rushed into the suite saw Hitler, dead from a bullet 
through his mouth, and Eva Hitler, sitting in a chair, dead 
from a poison capsule. It was their choice — capture and degrada- 
tion or self-inflicted death. Following instructions of hours be- 
fore by Hitler, SS guards bore the bodies up to the garden, 
doused them with gasoline, and set them aflame. The tragically 
fated pair had learned what furious partisans had done to 
Mussolini and his mistress, Clara Petacci: following the retreat 
and surrender of German armed forces in northern Italy, the 
former dictator and his love were hanged upside down in a 
Milano marketplace and pelted with stones. 

Bormann dispatched two teletype messages to Flensburg: 

GRAND ADMIRAL DOENITZ — 

IN PLACE OF THE FORMER REICHSMARSHAL GOERING THE FUEHRER 
APPOINTS YOU, HERR GRAND MARSHAL, AS HIS SUCCESSOR. WRITTEN 
AUTHORITY IS ON ITS WAY. YOU WILL IMMEDIATELY TAKE ALL SUCH 
MEASURES AS THE SITUATION REQUIRES. 

BORMANN 

Then, 

THE TESTAMENT IS IN FORCE. I WILL JOIN YOU AS SOON AS POSSIBLE. 
TILL THEN I RECOMMEND THAT PUBLICATION BE HELD UP. 

BORMANN 

A third teletype was received by Doenitz: 

THE FUEHRER DIED YESTERDAY AT 15.30 HOURS. TESTAMENT OF 29 APRIL 
APPOINTS YOU AS REICH PRESIDENT, REICH MINISTER DR. GOEBBELS AS 



172 



REICH CHANCELLOR, REICHSLEITER BORMANN AS PARTY MINISTER, REICH 
MINISTER SEYSS-INQUART AS FOREIGN MINISTER. BY ORDER OF THE 
FUEHRER, THE TESTAMENT HAS BEEN SENT OUT OF BERLIN TO YOU, TO 
FIELD MARSHAL SCHOERNER, AND FOR PRESERVATION AND PUBLICATION. 
REICHSLEITER BORMANN INTENDS TO GO TO YOU TODAY AND INFORM 
YOU OF THE SITUATION. TIME AND FORM OF ANNOUNCEMENT TO THE 
PRESS AND TO THE TROOPS IS LEFT TO YOU. CONFIRM RECEIPT. 

GOEBBELS 

It is noted that Bormann's name had been unintentionally 
omitted from the message at the receiving end by Doenitz's 
cipher clerk. 

But one individual in the bunker was determined to live. 
Martin Bormann had remained unflaggingly loyal to Hitler to 
the end; through hard work and dedication he had gained per- 
manent leadership of the National Socialist Party and of its 
members and adherents in Germany and elsewhere in the world. 
It was his legacy from the Fuehrer. He had known that the 
Goebbels family had planned to die, and that Doenitz would 
leave office after surrender of the Third Reich. He was certain 
too that Seyss-Inquart, the Reich Commissioner for the Nether- 
lands who had succeeded von Ribbentrop as foreign minister, 
would not last the course; that he and he alone, Party Minister 
Bormann, would be left as leader, competent to command the 
global network of commerce he had painstakingly fostered. 
With this, Germany would move again into the forefront of 
world economic leadership. 

At this moment Bormann's thoughts must have turned in- 
ward. It was a time for introspection. He knew he had bested 
his peers in one of the most grueling contests ever waged for 
control of the executive suite. Bormann had won out because of 
his Machiavellian proclivities, his attention to detail, his bru- 
tality to those who opposed him. With Hitler always behind 
him and the unlimited power which this represented, it was 
wise to step aside when the Reichsleiter made his moves, which 
were always well planned and never made on the spur of the 
moment. As one example, Field Marshal Erwin Rommel, Hit- 
ler's famed general of the North African and French campaigns, 
told of a brush he had with Martin. Bormann during the Polish 
campaign of 1939. When Warsaw fell on September 19, Hitler 



173 



entered Danzig and broadcast to the Third Reich. Afterwards, 
he drove on a sightseeing trip to the port of Gdynia. The entry 
was narrow and crowded and as the Hitler motorcade ap- 
proached Erwin Rommel, as temporary traffic controller, per- 
mitted only Hitler's car and one other to pass through the barri- 
cades. The third car carried Reichsleiter Bormann, who was 
furious at being denied entry with his Fuehrer. "I am head- 
quarters commandant," Rommel told Bormann, "and you will 
do what I say." 

Bormann waited five years, Rommel was to observe, to take 
his revenge. Following the German defeat in Normandy in 
1944, those in military command came under critical review 
at Hitler's headquarters. When Rommel's record of hostility 
to the regime came to Bormann's desk, and he remembered 
being snubbed in Gdynia, he scribbled on the margin of the 
report which was to go to Hitler: "This confirms other, even 
worse facts that have already reached me." It was the coup de 
grace for Rommel, who was later to be given his choice of death 
by cyanide capsule and a Field Marshal's funeral in Berlin, or 
death by hanging and disgrace for his family. 

As it became decision time for escape from the bunker, Bor- 
mann gathered together the personal papers that remained on 
his desk, everything else having long since been shipped in car- 
tons via Munich to South America. He could hear a celebration 
in the eating halls of the bunker: piano music, dancing, and 
laughter as champagne was consumed, for with the death of 
Hitler the tension had been broken, and there was the frenzy 
of "What next?" for them all. In a way it was like the break- 
down of other headquarters, as in Saigon years later, or in the 
White House after the formalities of President Nixon's depar- 
ture, when the staff felt that the symbolic power generated by 
the executive branch had been turned off, disconnected. But in 
the Fuehrerbunker, of those who survived and made their 
escape, many would later be rounded up by the Russians and 
sent to Moscow for imprisonment. The Soviet command didn't 
know what to do with the bunker crowd, and prison, they rea- 
soned, was as good a place as any until the Hilter-Bormann 
situation could be sorted out. 

In the Fuehrerbunker, on the night of May 1, 1945, Bormann 
assembled the staff: high party officials, soldiers, women workers. 



174 



He informed them of the escape plan and the designated order 
of exodus. They were to move in compact groups through tun- 
nels to the subway station in the Wilhelmsplatz, then to creep 
along the tracks to the Friedrichstrasse station and surface to 
the street, after which they were to make their way over the 
Weidendamm Bridge over the Spree, and to personal safety, 
to vanish among the general population. Instructing them all 
to be ready by 11:00 P.M., Bormann dismissed them. 

In the privacy of his office, Bormann finished his own plans 
for evading surrender and trial. He had discussed his intended 
total escape in detail on the night of April 28-29 with his close 
confidant since 1941, Heinrich Mueller. Mueller was to become 
his security chief in South America; he was SS chief group 
leader and senior general of the Waffen SS. During the siege of 
Berlin, Mueller had not been quartered in the chancellery 
bunker. Regularly, he went there to report to Bormann, always 
returning to the Kurfuerstenstrasse building that Gestapo head- 
quarters had moved to after being bombed out of the Prinz- 
Albrecht-Strasse offices. Its underground shelter was as safe as 
Hitler's, and it had many advantages: secret rooms accessible 
only through ingeniously disguised doors, water and electricity, 
stores of food and medical supplies, and a radio transmitting 
room whose signal was powerful enough to reach Buenos Aires; 
also several tunnels leading to emergency exits. Here Mueller felt 
at ease, able to plan with care the flight of Bormann and him- 
self out of reach of any Allied or Russian captors, beyond the 
borders of Germany, once they had extricated themselves from 
metropolitan Berlin. 

Mueller's last visit to the Fuehrerbunker had been on the 
night of April 28, when he had been summoned to interrogate 
SS Gruppenfuehrer Hermann Fegelein, who represented Him- 
mler in the bunker, but who, long before had changed personal 
allegiance to Hitler. To make the ties even closer, he had 
married Eva Braun's sister, thus becoming in a way Hitler's 
brother-in-law, if only for a brief time. On April 27 he had left 
the bunker for his residence in Charlottenburg, a fashionable 
suburb. Suspicions within the bunker were at fever pitch, so 
when his absence was noted Hitler took it to mean that he had 
been involved in Himmler's personal peace plot, and sent two 
of his SS bodyguards to bring Fegelein back. Fegelein had as- 



175 



serted that he only wanted to live, not die; for this attitude, 
he was stripped of all rank and shot for desertion under fire and 
marginal complicity in Himmler's treachery. 

As Russian shells could be heard pounding the concrete 
structure overhead, Bormann and Mueller continued to plan the 
details of their escape strategy. Bormann would move out 
with the middle group, and Mueller would go back to his own 
headquarters, and from there leave promptly for Schleswig-Hol- 
stein, where the two would be reunited. They shook hands, and 
Mueller climbed the fifty steps of the emergency exit, then 
crossed the chancellery gardens and disappeared into the night. 

At about eleven o'clock, on the night of May 1, the first 
group moved through the exits and tunnels beneath Berlin. Bor- 
mann was in the center cluster. Once above ground, they saw 
their city in flames. Making their way to the Weidendamm 
Bridge, Bormann's group was hindered by a Soviet antitank bar- 
rier on the far side. They waited until German tanks appeared 
and destroyed the barrier, moving forward with the tanks. These 
few moments were absolutely critical in any historical discussion 
of the fate of Martin Bormann; either he perished at this point 
in time, or he didn't. This episode was aptly described by H. 
Trevor Roper in The Last Days of Hitler. 

A miscellaneous group including Bormann, Stumpfegger (Hitler's 
surgeon), Kempka (Hitler's driver), Beetz (Hitler's second pilot), 
Axmann (Hitler's Youth leader), Naumann (Goebbels' assistant), 
Schwaegermann (Goebbels' adjutant), and Rach (Goebbels' 
driver). Some of these passed the barrier with the leading tank and 
reached the Ziegelstrasse about three hundred yards ahead; but 
there was a Panzerfaust (anti-tank bazooka fire) falling upon the 
tank, which caused a violent explosion. Beetz and Axmann were 
wounded; Kempka was knocked out and temporarily blinded; Bor- 
mann and Stumpfegger were thrown to the ground, perhaps uncon- 
scious, but escaped injury. The advance was frustrated, and the 
parties retreated once more to the bridge. 

Professor Roper, as representative of both British and Amer- 
ican intelligence services in the investigation surrounding the 
last recorded days of Hitler and Bormann, subsequently inter- 
viewed all surviving members of this group. His findings were 
that Bormann, along with Stumpfegger, made his way east- 



176 



ward along the Invalidenstrasse in the direction of Stettiner 
station. Here Artur Axmann caught up with them, later to 
testify that he found both men outstretched on their backs, 
moonlight on their faces (an odd description!), both dead. But 
he admitted that he could not look at them closely; Russian fire 
had prevented it. He made his own way to safety, ultimately 
reaching the Bavarian Alps. 

Thus, there is a sole known witness to the alleged deaths, and 
it is general belief in West German circles, as in the Israeli 
Mossad, that he falsified his testimony not only to protect 
Martin Bormann in general, but also in direct obedience to the 
orders of SS General Heinrich "Gestapo" Mueller. 

Eleven years later Professor Roper again examined the re- 
vealed facts of the supposed demise of Martin Bormann, and 
stated that the evidence since had not altered his 1945 opinion. 

Even in 1945 I had three witnesses who independently claimed to 
have accompanied Bormann in his attempted escape. One of these 
witnesses, Artur Axmann, claimed afterwards to have seen him dead. 
Whether we believe Axmann or not is entirely a matter of choice, 
for his work is unsupported by any other testimony. ... If he wished 
to protect Bormann against further search, his natural course would 
be to give false evidence of his death. This being so, I came, in 1945, 
to the only permissible conclusion, viz.: that Bormann had certainly 
survived the tank explosion but had possibly, though by no means 
certainly, been killed later that night. Such was the balance of 
evidence in 1945. How far is it altered by the new evidence of 1956? 

The answer is, not at all. On the one hand both Kinge and Baur 
state that Bormann was killed in the tank explosion — or at least 
they say that they think he was killed, for, once again, they admit 
that the scene was confused and that they never saw the body. 

On the other hand, Mengershausen (an officer of Hitler's body- 
guard), declares firmly that Bormann was not killed in that explosion. 
He says that although Bormann was riding in a tank, it was not his 
tank which was blown up. And further, another witness has turned 
up since 1945 who states that he was with Bormann after the 
explosion. This is a former S.S. Major Joachim Tiburtius, who, in 
1953, made a statement to a Swiss newspaper ( Der Bund of Berne 
on February 17, 1953). In the confusion after the explosion Tibur- 
tius says that he lost sight of Bormann, but afterwards he saw him 
again at the Hotel Atlas. "He had by then changed into civilian 
clothes. We pushed on together towards the Schiffbauerdamm 



177 



and the Albrechtstrasse. Then I finally lost sight of him. But he had 
as good a chance to escape as I had." 

In 1973 Roper wrote again in the New York Times: "I have 
my own reasons for thinking that Bormann may well have 
escaped to Italy and thence to South America." 

One source in West Germany, who has never been wrong in 
his disclosures to me about Bormann and his people, then and 
now, told me he had met up with Bormann in the early hours 
of May 2. Both having superficial wounds, they were being at- 
tended to in a German military first aid station at Konigswurst 
Erhausen, 20 kilometers southeast of the chancellery. This 
Scharfuehrer of the Waffen SS, in his late teens, found himself 
seated alongside a familiar-looking, short, heavy-set man in a 
leather overcoat stripped of insignia. It was Martin Bormann; a 
shell fragment had injured his foot; he was resting after a doctor 
had treated it. The young sergeant said to Bormann and 
Bormann's companion that he was on his way to the house of 
his uncle, a Luftwaffe pilot who had been killed in Russia. They 
were joined by another officer who had been listening to their 
conversation, and accompanied one another through the dark 
streets to the house at Berlin Dahlem, Fontanestre, 9, grateful 
for the young man's offer of a temporary refuge. This former 
German sergeant made the following statement to me as we sat 
on a public bench overlooking the Rhine, on April 18, 1971; 
he repeated it to me almost word for word in 1977: 

The house was vacant, but I knew where the key was, so we went 
inside. Upstairs we changed into suits that were my uncle's. We ate, 
then slept. We stayed inside for the next three days. None of us 
dared to go outside, because members of the German communist 
underground, led by Walter Ulbricht, were walking the streets as 
secret police for the Russians. After the third day, Reichsleiter 
Bormann, the officer who was his companion, and the third officer 
decided to leave. The third officer went one way; Bormann and his 
friend headed northwest into Mecklenburg, to a place where they 
said other clothing, some gold, and various currencies had been 
secreted for this escape. They left at night; I stayed in the house. 
Two days later they came back. They had reached Neuruppin, 60 
kilometers northwest of Berlin, but had not been able to get through 
the Russian lines. They stayed on in the house with me for another 



178 



three days, then left, this time headed for the British zone and 
Flensburg. 

The SS sergeant said that much later he had met up with 
Bormann's companion of those fateful ten days; he assured him 
that the party minister had made it safely through the British 
lines by following the Autobahn to the outskirts of Flensburg, 
where he was to make contact with Grand Admiral Doenitz. 

Martin Bormann, in the interim, had met Heinrich Mueller, 
who had slipped out of Berlin earlier and was waiting in a pre- 
arranged safe house. Mueller told Bormann it would not be wise 
to meet with the new Reich president, who by now had carried 
out the unconditional surrender in both Rheims and Berlin. He 
predicted a war crimes trial of all German leaders, and said that 
Bormann would be inviting serious difficulty if he surfaced at 
this particular time. Martin Bormann secluded himself in a pri- 
vate German sanitarium in Schleswig-Holstein. The Gestapo 
chief, taking on the security of the new party minister and of his 
safe transportation to South America by assorted routes, made 
the exact plans that he would effect at precisely the right time. 

Mueller had already initiated a strategy of deception to ex- 
plain his own disappearance from prominent circles in Berlin. 
The week he slipped out of the German capital, his grieving 
family gathered for his "funeral." A coffin was borne to a ceme- 
tery where it was buried with appropriate ceremony. The grave 
was marked with a headstone bearing the words "Our Dear 
Daddy," Mueller's name, his birthdate, and the date of his 
alleged death in Berlin in 1945. 

Several years following this incident, an editor of a German 
news magazine, acting on an informer's tip generated by the 
master deceptionist Mueller himself, from South America, ob- 
tained a court order in 1963, and the grave was opened. When 
the coffin in question was unearthed and opened, the editor and 
the attending officials found three skeletons, none remotely 
matching Heinrich Mueller's short and thick-set measurements, 
or his markedly prominent forehead. 

A deception plan for Bormann had been completed by Muel- 
ler in Berlin. Tops in police work and crafty beyond imagining, 
he provided for a matching skeleton and skull, complete with 
identical dental work, for future forensic experts to ponder 



179 



over and to reach conclusions that suited his purpose. Mueller 
was a former inspector of detectives in the Munich police de- 
partment; he had been brought into the higher echelons of the 
Gestapo by Reinhard Heydrich because of his professionalism 
and brilliance. He had risen to the rank of SS chief group leader 
and senior general of the Waffen SS. The solution was ele- 
mentary; his motivation was protection and enhancement of the 
highest authority of the state. To this principle, Mueller had 
been devoted for a decade as chief of police. 

His scheme of substituting a stand-in for Martin. Bormann's 
body in the freight yards of Berlin was told to me three different 
times by three different individuals. One was an agent whose 
career was in the Secret Intelligence Service of the British For- 
eign Office, one served the Federal Republic of Germany, and 
one was a member of Mossad, the exterior service of Israeli intel- 
ligence. The first tip came over dinner in 1947, in the U.S. press 
club in Frankfurt. It was the day I returned from Berlin and a 
personal meeting with General Lucius D. Clay, military gover- 
nor of the U.S. Zone of Occupation. General Clay had offered 
me the position of his civilian deputy, but I had turned it down 
with some reluctance, preferring to remain a European reporter 
for American newspapers. During the press club dinner, the 
British agent and I discussed the fascinating and bizarre disap- 
pearance of Reichsleiter Bormann; this source said flatly that 
Mueller had engineered Bormann's escape, using the device of 
a concentration camp look-alike to throw future investigators off 
the scent. Many years later, in 1973, on a visit to Bonn, a con- 
versation with one of General Gehlen's aides in the Federal Re- 
public intelligence service confirmed the 1947 British tip. The 
German stated: "The skull represented as Bormann's is a fraud. 
Naturally the West German government wishes to bury the past 
and establish Bormann's death once and for all. They have been 
constantly unsettled by continued revelations and scandals." In 
1978, an Israeli Mossad agent with a German specialization 
said to me that they had never closed the Bormann file in Tel 
Aviv. "We know he is in South America. We are not very com- 
pelled to find him because he was never personally involved in 
the 'final solution.'" The Israeli added: "Bormann's business 
was business, and from what I know personally he did a thor- 
ough job of shifting German assets away from the Third R eich." 



180 



To piece my information together: General Heinrich Mueller 
initiated his Bormann scheme during the waning months of the 
war in the time frame when the Reichsleiter was moving to 
transfer German assets to safe havens in other places. At Con- 
centration Camp Sachsenhausen he examined several inmates 
in the special elite group known as Sonderkommando, those who 
had been working in the German counterfeit operation of Brit- 
ish pound notes and of other currencies. Documents prepared 
by them would also be used by SS men in their flight at war's 
end (eventually, over 10,000 former German military made it 
to South America along escape routes ODESSA and Deutsche 
Hilfsverein). The Sonderkommando, placed in a special context 
within the camp, were treated as the skilled professionals they 
were — engravers, documents specialists, and quality printers — 
who had been rounded up from occupied countries and put to 
work for the Third Reich. 

Peter Edel Hirschweh, who participated in this special work 
and survived, described it as follows: 

All of the inmates, without any exceptions, were Jews or descendants 
of mixed marriages. We were "bearers of secrets." Even if those two 
qualifications had not alone been sufficient to classify us as a death 
command, we received additional confirmation and proof through 
the following events: If some of the prisoners felt slightly ill, re- 
ceived an injury on the finger (while engraving) or the like they 
were taken to the doctor, heavily guarded, to receive treatment 
there; the physician was not allowed to talk to them at all. Persons 
who were seriously ill were not allow to go to the infirmary, even if 
they could be cured there. They were isolated in the washroom and 
if this did not help, they were liquidated, i.e., killed. 

When Heinrich Mueller visited Sachsenhausen he walked 
through the engraving, printing, and document areas looking for 
any inmates who might resemble Bormann. In one he noticed 
two individuals who did bear a resemblance in stature and facial 
structure to the Reichsleiter. He had them placed in separate 
confinement. Thereupon a special dental room was made ready 
for "treatment" of the two men. A party dentist was brought 
in to work over and over again on the mouth of each man, until 
his teeth, real and artificial, matched precisely the Reichsleiter's. 
In April 1945, upon completion of these alterations, the two 



181 



victimized men were brought to the Kurfuerstenstrasse building 
to be held until needed. Dr. Blaschke had advised Mueller to use 
live inmates to insure a believable aging process for dentures 
and gums; hence the need for several months of preparation. 

Exact dental fidelity was to play a major part in the identifi- 
cation of Hitler's body by the invading Russians. It was to be of 
significance in Frankfurt twenty-eight years later, when the 
West German government staged a press conference to declare 
that they had "found Bormann's skeleton proving he had died 
in Berlin's freight yards May 1-2, 1945." 

Dr. Hugo Blaschke was the dentist who had served both Hitler 
and Bormann. He had offices in the fashionable professional 
area of Uhlanstrasse, but he always went to the chancellery for 
his two most important clients. Bormann had established a 
well-equipped dental office there, where Dr. Blaschke and his 
nurse, Fraulein Kaete Heusemann, would take care of the dental 
requirements of the Fuehrer and the Reichsleiter. The dental 
records for both were kept in the chancellery. When the Rus- 
sians had threatened Berlin, Dr. Blaschke prudently moved his 
practice to Munich, but Fraulein Heusemann had stayed on. 
Hitler's dental charts were never found, because Bormann had 
removed them from the chancellery files. However, the Russians, 
who had wanted complete identification of Hitler after the fall 
of Berlin, brought Fraulein Heusemann to Soviet headquarters. 
She had identified the dental fittings gathered in a cigar box as 
belonging to Adolf Hitler. This was confirmed by the dental 
technician, Fritz Echtmann, who had made the fittings for 
Hitler on order of Dr. Blaschke. 

Once they had made the identifications, both were shipped 
off to Moscow, remaining there in prison so that they could not 
communicate with others for several years. They were classified 
by the Russians as among the chancellery group who had sur- 
vived the bunker; they would spend years in Russian prisons 
and slave camps until the Kremlin leaders decided how to han- 
dle their public announcement of Hitler's death — suicide in the 
bunker, or escape to Spain and South America, as Stalin first 
believed. 

In Bormann's case, the problem was more complex, more 
challenging. Yet under Mueller's skillful guidance, two bodies 
were planted; their discovery was made possible when an SS 



182 



man, acting on Mueller's orders, leaked the information to a 
Stern magazine editor as part of a ploy to "prove" that Bormann 
had died in the Berlin freight yard. The stand-ins for Bormann 
were two unfortunates from Concentration Camp Sachsenhau- 
sen, who had been killed gently in the Gestapo basement secret 
chambers with cyanide spray blown from a cigarette lighter (a 
killing device used later by the KGB in 1957 and 1959 against 
Lev Rebet and Stephen Bandera, two leaders of the Ukrainian 
emigres in Munich). At Gestapo headquarters, the night of 
April 30, the bodies were taken by a special SS team to the 
freight yards near the Weidendamm Bridge and buried not too 
deep beneath rubble in two different areas. The Gestapo squad 
then made a hurried retreat from Berlin, joining their leader, SS 
Senior General Heinrich Mueller, in Flensburg. 

The funeral and burial caper was to be a Mueller trademark 
throughout the years of searching for Martin Bormann. The 
Mossad was to point out that they have been witnesses over the 
years to the exhumation of six skeletons, two in Berlin and four 
in South America, purported to be that of Martin Bormann. All 
turned out to be those of others, although in Frankfurt in 1973 
the dental technician, Fritz Echtmann, after years as a Russian 
prisoner, was to say that the dental work found in the skull of 
the skeleton declared to be the remains of Bormann resembled 
those fillings he had worked on in 1944. Simon Wiesenthal, 
director of the Jewish Documentation Center in Vienna, had 
been invited to Frankfurt by West German authorities who were 
presenting the press event, with the CIA in the background. He 
said that, while the skull resembled Bormann's, he doubted it 
was Bormann. Still, Heinrich Mueller had done his job well, and 
from South America he pointed the Bonn government's in- 
vestigators through intermediaries toward this second planted 
Bormann skeleton. So my sources state; the fabrications of 1945 
continue to provide the party minister with his "passport to 
freedom." 

The full surrender of all German forces was signed at Rheims, 
France, on May 7, 1945, and I was a witness to that historic 
event. Reich President Doenitz had sent both Admiral von 
Friedeburg and General Alfred Jodl as his representatives to 
General Eisenhower's Supreme Headquarters, Allied Expedi- 



183 



tionary Force, operating out of a red brick building that in 
peacetime was a school for girls. The two German notables ar- 
rived on May 6 for preliminary discussions. They played for 
time, knowing that each hour gained would enable their coun- 
trymen on the Eastern Front to retreat further into Germany 
until they could surrender to British or American forces. There 
was to be no separate surrender; it was now all or nothing, and 
General Eisenhower had imposed a time limit of May 7 on the 
Germans for general and total capitulation. General Jodl re- 
ported to Doenitz: "General Eisenhower insists that we sign 
today. If not, the Allied fronts will be closed to persons seeking 
to surrender individually. I see no alternative: chaos or signa- 
ture. I ask you, to confirm to me immediately by wireless that 
I have full powers to sign capitulation." 

This authorization was duly received, and in a small lecture 
hall on the second floor of the school building, General Jodl 
signed the instrument of unconditional surrender, at 2:41 on the 
morning of May 7. Lieutenant General Bedell Smith signed on 
behalf of General Eisenhower, the Supreme Allied Commander, 
with British, French, and Russian officers as witnesses. 

After General Jodl had placed his signature on the docu- 
ments, he addressed the senior Allied officers present. He asked 
for a show of compassion to the German people, who had suf- 
fered so much during this war. No one spoke during his state- 
ment, for those listening to the plea were professionals too and 
knew the shattering emotions that both former antagonists 
were undergoing as they laid down the German sword and au- 
thorized the capitulation of their armed forces on land and on 
the high seas. Admiral von Friedeburg was later to take his life. 

General Jodl then rose and walked from the room, along a 
short hallway to General Eisenhower's office. There he encoun- 
tered the American general, grim and unsmiling as befitted the 
occasion. Behind the Supreme Commander stood the ever- 
present Kay Summersby, driver and companion to the general in 
England, North Africa, and France. Jodl reported he had signed 
the instrument of surrender; Eisenhower asked him, "Do you 
understand all that it means and the conditions you must carry 
out?" General Jodl nodded briskly, said "Ja," saluted, and left 
the office of the Supreme Allied Commander. As he walked 
along the hallway he was joined by Admiral von Friedeburg. 



184 



At this instant, I intruded in Jodl's tightly controlled self- 
possession, asking him, "General, did Martin Bormann make 
it safely out of Berlin ?" The Nazi leader, surprised at this query, 
replied readily and in a barely audible tone, "Of course. He is 
a natural survivor. " Then he was gone, down the staircase, to 
the staff car outside that took them back to Grand Admiral 
Doenitz. 

Two days after this event, in the modest house on Fontan- 
estre, 9, Party Minister Martin Bormann was calculating how 
to slip through the British lines to Flensburg. Peril and uncer- 
tainty surely would be ahead before he reached his destination — 
Buenos Aires. He remained methodical and matter-of-fact as he 
planned his departure from Berlin, although only days before 
he had failed to penetrate the Russian lines to Schleswig-Hol- 
stein. He believed firmly in his destiny and was convinced that 
he would rendezvous with General Mueller in the safe house 
they had agreed upon. 

"It was early morning when Bormann left the house," related 
my Waffen SS source, who, as I said earlier, remained behind, 
plotting his own best course. Only nineteen, he yearned to reach 
Bonn and look out for his widowed mother. He went on: "Bor- 
mann was accompanied by the aide who had escaped with him 
from the Fuehrerbunker the night of May 1-2, and both men 
set off along the autobahn. Months later I happened to meet 
the aide in Frankfurt. He remarked, ~We passed through British 
lines without trouble, without even being noticed, just another 
two shabbily dressed men. I left the party minister with General 
Mueller, and went back to Frankfurt.'" 

This SS source, one of so many I have talked with and ques- 
tioned, will not speak publicly of these matters even today. He 
fears retribution from South America, and the present West 
German government, which maintains a tight rein on any telling 
of the true Martin Bormann story. The experience of Quick 
Magazine, a West German news weekly, testifies to that fact. 
The editor of Quick sent a five-man reporting team to South 
America to do a Bormann story. When the reporting team re- 
turned to West Germany with a magazine series detailing Bor- 
mann's presence in Argentina and his continuing links with the 
industrial and financial circles of the Ruhr, the series was 



185 



squashed by the Bundesamt fur Verfassungsschutz, the West 
German equivalent of the FBI. The reason given: "It was not 
in the national interest." If the story were published, Quick 
would be put out of business and the five reporters jailed. The 
matter had gone to the highest levels of government in Bonn 
where the decision had been made. This SS veteran admires 
"Fuehrer Bormann" and worked for him for a while in South 
America; but even so, were he to be indiscreet and draw atten- 
tion to himself, he might be signing his own death warrant. 



186 



FOUR MONTHS AFTER MARTIN BORMANN WENT 
to ground in Schleswig-Holstein, the international authorities 
seeking to try Nazi leaders for war crimes and crimes against 
humanity decided (in August 1945) that the site of these mili- 
tary and civilian tribunals was to be Nuremberg. It was the first 
time in the history of modern warfare that those who gave the 
orders and were responsible for the particular aspect of genocide 
were to be brought before an international court of justice. Up 
until then it had generally been the middle and lower echelon 
officers and soldiers who had been made to suffer as retribution 
for aggression and atrocities, but now those at or near the top 
of the hierarchy stood before the bar. In Germany, by October 
1945, 21 defendants bad been brought to Nuremberg prison to 
await their trials. The twenty-second individual, Martin Bor- 
mann, was to be tried in absentia; the twenty-third, Robert Ley, 
Reichsleiter of the labor front which had also operated the 
forced-labor camps, a political opponent of Bormann for many 
years, committed suicide before the trials began. 

The first Nuremberg trial dragged on for ten months before 
sentences were handed down. Ten Nazi leaders were sentenced 
to death, and went to the gallows in the small gymnasium of the 
prison. Foreign Minister Joachim von Ribbentrop was first to 
die; he was followed by Field Marshal Wilhelm Keitel, Ernst 
Kaltenbrunner, Alfred Rosenberg, Hans Frank, Wilhelm Frick, 



189 



Julius Streicher, Fritz Sauckel, Alfred Jodl, and Arthur Seyss- 
Inquart. Only two escaped, Reichsmarshal Hermann Goering 
and Party Minister Martin Bormann. Goering had gulped down 
a cyanide capsule smuggled to him in his cell, leaving a farewell 
message that death in this manner was preferable to the indig- 
nity of hanging. Certainly there was little dignity in the somber 
setting where ten former national leaders were put to death. The 
executions were accomplished with precision; the American 
sergeant who presided over this macabre event said, "Hot damn, 
110 minutes, right on time!" 

But if one hardened sergeant was insensitive, there were those 
all over the Western world who spoke out against the trials and 
continue to do so today. Prominent among the doubters was Tel- 
ford Taylor, U.S. chief counsel at Nuremberg. Ten days before 
the executions of the German leaders, the late Senator Robert 
A. Taft had condemned the trials and sentences. He strongly 
suggested that involuntary exile might have been wiser, more in 
keeping with professed American values. He had said that the 
trials, whose rules of law were formulated and enacted on the 
spot and then made retroactive, "violate the fundamental prin- 
ciple of American law that a man cannot be tried under ex post 
facto statute. . . . Nuremberg was a blot on American Consti- 
tutional history, and a serious departure from our Anglo-Saxon 
heritage of fair and equal treatment, a heritage which had rightly 
made this country respected throughout the world. . . . About 
this whole judgment there is a spirit of vengeance, and ven- 
geance is seldom justice. The hanging of men convicted will be 
a blot on the American record which we shall long regret." 

Taft further stated, "In these trials, we have accepted the 
Russian idea of the purpose of the trials — government policy and 
not justice — with little relation to Anglo-Saxon heritage. By 
clothing policy in the forms of legal procedure, we may discredit 
the whole idea of justice in Europe for years to come." 

The Nuremberg Trials were man's first fumbling attempts to 
outlaw war, and their legality was obscure, their morality con- 
fused. The Allies knew that they too had been guilty of war 
crimes. Dresden, for example, was consumed by flames caused 
by Allied firebombing, a city open and undefended. Several hun- 
dred thousand civilians perished, more than those who died from 
the American atomic bombs later to be dropped on Hiroshima 



190 



and Nagasaki. The attack on Dresden was needless, ordered 
personally by Winston Churchill over the objections of his air 
marshal, who had demanded a written order from the Prime 
Minister before reluctantly giving a directive for the bombing. 
Churchill, the object of suspicion and abuse from Stalin 
throughout the war, felt that such an act would pay dividends 
in his later dealings with the Soviet leader. But when aerial 
photographs of Dresden's flaming destruction were sent by 
Churchill and reached Moscow, they were merely tossed aside 
with a shrug by Stalin. The Russians too had their concentration 
camps, Jewish pogroms, and slave labor and pursued wars of 
aggression against Finland, Poland, Estonia, Latvia, and 
Lithuania, not to mention the other countries they had sucked up 
into the communist bloc. Inside Mother Russia itself, Stalin 
had sent uncounted Bolsheviks to the death cellars of Lubyanka 
prison and the concentration camps. Throughout World War 
II, the executions quietly went on; after the war they continued 
— for instance, the anti-Semitic drive in Leningrad and the ex- 
termination of the Jewish antifascist committee. 

In all theatres of war unspeakable brutalities had occurred, 
from the 300,000 who died at Japanese hands in Nanking in 
1937 to the unforgivable treatment of Allied soldiers in Japanese 
prison camps. It was Russian troops who massacred 45,000 
Polish prisoners of war in Katyn forest, dumping the bodies into 
a mass grave. The reason? From these officers and soldiers would 
have come the opposition to communist rule in Poland in the 
years to come. Also, in the years to come, the United States was 
to be diminished with the aggressions in Vietnam and such 
atrocities as Son My and My Lai. 

The first Nuremberg trial should have been labeled for what 
it was: an-eye-for-an-eye vengeance for the crime of racial ex- 
termination. If it had been so labeled, the spirit behind Nurem- 
berg would have been understandable, not conflicting with the 
issues of legality and justice so troubling to many leaders of 
jurisprudence in the United States and Europe. The four Nazis 
most directly responsible for the decision to invoke racial geno- 
cide were Hitler, Goering, Himmler, and Heydrich, and all had 
died before the ten other officials took their final walk to the 
gallows. During the ten months of trial, the 21 defendants who 
sat in the dock at Nuremberg being tried for their part in wars 



191 



of aggression were no more unprepossessing than their Allied 
counterparts might have been had they lost the war and found 
themselves awaiting trial and sentencing. Leadership on both 
sides was represented by educated academics, administrators, 
and military notables who saw to it that the war kept moving 
along. Still, Nuremberg was a landmark, and if it did not halt 
the proliferation of wars it reinforced the international principle 
that there are standards of human behavior all nations should 
adhere to. 

As the first trial was concluded, with sentences pronounced 
and carried out on the 21 defendants, the twenty-second was 
stirring in his bolthole. Martin Bormann had been moved from 
Schleswig-Holstein to a safe house in Denmark by his security 
chief, Heinrich Mueller. The party minister had been tried in 
absentia at Nuremberg; while found not guilty on charges of 
crimes against peace, for he had not been one of the early plot- 
ters of war, he had been found guilty as charged of war crimes 
and crimes against humanity. Bormann believed he was not 
guilty on any of the counts; but he also knew that disappearing 
was the only course, else he too would have been hanged until 
dead in the gymnasium of Nuremberg prison. 

Martin Bormann became the object of history's greatest man- 
hunt. At least one thousand Allied intelligence officers, repre- 
senting Great Britain, the United States, France, and Russia, 
were on his trail, together with an uncounted number of in- 
formers who coveted the reward offered for information leading 
to his capture. But Heinrich Mueller had strung an invisible, 
impenetrable defense between Bormann and those who sought 
him. Select units of the Gestapo continued to function, unoffi- 
cially, and those who now reported directly to Mueller, under 
suspicion of surviving Berlin and therefore also a subject of 
search, were among the best secret police agents of the SS. Out 
of uniform, they continued to draw pay and expenses from their 
paymaster, representing Mueller, from SS funds held in a num- 
bered account in a Swiss bank. As the search for Bormann went 
from hot to cold to hot, Mueller continued to move the Party 
Minister around, back and forth between Schleswig-Holstein 
and Denmark, but staying clear of major cities such as Hamburg. 
Mueller had a network of loyal informers, SS men who had re- 
turned to their peacetime positions on German police forces at 



192 




Hans Bernd Gisevius giving testimony at the Nuremberg trials. Gisevius, 
a leader of the German underground during World War II, was also a 
double agent for the OSS. He was Allen Dulles's pipeline to Admiral 
Canaris, chief of the German Foreign Intelligence Service (Abwehr) until 
1944 who himself served as a high level British informer during most of 
the Second World War. 




Allen Welsh Dulles as he looked when 
serving as President Roosevelt's per- 
sonal emissary to Switzerland. He ran 
the Office of Strategic Services (fore- 
runner of the CIA) into Germany 
and on the continent from his head- 
quarters in Berne. 



Hermann Schmitz, pictured at the 
zenith of his career as president and 
chief executive officer of I. G, Farben, 
which was Germany's greatest source 
of foreign income during the Hitler 
years. Schmitz was a confidant and 
adviser to Martin Bormann. He was 
the principal architect of Farben's 
program of camouflaging its vast over- 
seas holdings under Bormann's direc- 
tive to find safe havens for German 
capital. During the period when Nazi 
excesses against Jews accelerated, 
Hermann Schmitz found places for 
I. G. Farben Jewish corporate officials 
and lesser staff members in Farben's 
foreign offices, particularly in South 
America. 





Bormann's capitulation message to Grand Admiral Doenitz, 
sent on April 29, 1945. It reads: "Dear Grand Admiral! Since 
all our divisions failed to appear, our situation seems to be 
beyond hope. The Fuehrer dictated the attached political 
testament last night. Heil Hitler! Bormann." 



Auslands-Ausweis 

Ltd. Nr £ 
QOIIig bis 34, *f. S6. 

Name: ^->^4^^>^«^m, *Vf C%&+r>. 
geb. am: i£ ^ in: T^W^vt^ 
Mitglleds-Nummer: ^ <5fZ</2 Elntr.: ^ sTr-^. 
Oberwiesen von: 



Nach (Land): 
(Stadt): 
Berlin W 33, _ 

TlMMHMt 4 



X 193 ^ 

__ flallonalsozlall8!l3CHe fl- 
JJ^Boitscne flrteiteroariel 

Ausfaoda-Organlsation 




The Nazi travel permit of Salesian 
priest Hans (Juan) Baumann, from the 
files of the FBI. Baumann, a friend of 
Hitler and Bormann, was described in 
1942 by J. Edgar Hoover as a "very 
dangerous Nazi." 



(Below) A confidential memo dated 
April 27, 1942, from J. Edgar Hoover 
to Colonel William J. Donovan, then 
Coordinator of Information, indicating 
that Hans (Juan) Baumann headed a 
Nazi espionage ring in Colombia. 



JOHN rOCAO I 




CC-2S*. 

PSBSONAL AND QCaiiBBtflkZ 
SrbrraJ Surran of itrurstitjatiatt BY SPECIAL MESSEN jj . 

Lhtttrb &tnle9 Xlruartmrn t of ilustirc 

ni:i9i>iiHUun, 3. <£. 



"15333 



DatT: ■* APR 27 IS-/ 



To: Colonel Vinioa J. Donovan 
Coordinator of Information 





a#«**tt • ••»*-[ 



From: J. Edgar Hoovor - Director, Federa l 'Btif oau of Investigation 
Subject: Hans (Juan) 3auaann 

Aa of possible Interest to you, thore Is being attached hereto a 
neaoraadun concerning one Hans (Juan) 3*unann. a Saleslan priest, believed 
presently to be located at Call, Colonbla. aad carrying on activities l„ 
connection with an espionage ring which utilises tee facilities of a 
clandestine radio station, PTL, la or near Santiago', Chile. Ia connection 
with Baunann there Is being attached also a photostatic copy of the party 
W< of Haas 3auaana Indicating menbershlp la the Aual and elevate organisa- 
tion. The information concerning Bauaana has been eecurad froa a confi- 
dential, reliable source. 

C0 ' CC»,& 



Enclosure 



li 




u 

•ea 

< 

51 
o 
o 



JUAN 00*1*60 KAON tOSA.hece eMreee el 
Viae fw*e*» AMTW lOJUVW.la cvarta parte #e les elavlentee alanaai 

Central de Inteligoncia 
MARtiN BORMANN 

C* aercoe ero 1B7.«92.«00.- 

In ddlerea 17.57e.3B*,. 

tn llbces etterlines 4,632,500,- 

Cn francos sulios 24.976. 442, • 

In florin., hol.ndf.r. B.379.030,. 

f> frencoo bsl;es 17.280.009,- 

In francos frmcesee _ S4. 968. 000,. 

In plotlno Ko,. 

Ca oro «fo. leMleO 

tn Sleaantes y Srillontes fcllates 4.63B.- 

/flde.redre CCIDlO CSPAftZA 
J(fC ACCIDENTAL A.l.C.A. 



A rare financial document of a joint bank account shared by Bormann and 
Peron in the Deutsche Bank of Buenos Aires, from the files of Central de 
Inteligencia of the Argentina secret police of the Ministerio del Interior. 

Martin Bormann had bank accounts in many cities, among them Berlin, 
Zurich, Buenos Aires and New York, when he served Hitler and Germany 
as Reichsleiter. His present account in the Deutsche Bank of Buenos Aires 
dates back to 1941 , when he began transferring funds through his personal 
account to Juan and Eva Peron. Even then he regarded Argentina as the 
most likely sanctuary for himself and Hitler, if Germany collapsed. But 
it was necessary to sweeten the growing relationship with the Perons with 
a flow of money that reached a total of $100,000,000 by 1955 when Juan 
Peron was forced into exile, first in Panama and then Madrid. 




Martin Bormann's eldest son. Adolph, 
emerging from a Bavarian hospital 
after being nearly killed by a six-ton 
truck. Adolph resigned from the Jesuit 
order after being denied a parish in 
South America by the Vatican. He is 
married to Cordula, a former nun. 
Both now live and work in Bolivia. 



(Below) Hermann Schmitz, president 
of I.G. Farben, being sentenced to 
four years in prison at the Nuremberg 
trials for his participation in the plun- 
dering of industries in Nazi occupied 
territories. The trial of the Farben 
officials ran for nearly a year and 
ended on July 29, 1948. 





The author (left) discussing the West German economy 
with Dr. Hermann J. Abs, 83 years old, now Honorary 
President of Deutsche Bank A.G., at a luncheon in 
New York City. 




Paul Manning when he was a CBS News correspondent in Europe during World War I 



both local and national levels. The movement of "enemy 
forces," as they described Allied agents, served Bormann and 
Mueller as an early warning system. 

Bormann took all these precautions in stride, comfortable in. 
the knowledge that his security was in the hands of top profes- 
sionals, and concentrated on his immediate tasks at hand, much 
as he had during the final days in the Fuehrerbunker. Wherever 
positioned, he turned his hiding place into a party headquarters, 
and was in command of everything save security. Telephones 
were too dangerous, but he had couriers to bear documents to 
Sweden, where a Bormann commercial headquarters was main- 
tained in Malmo to handle the affairs of a complex and growing 
postwar business empire. From Malmo high-frequency radio 
could transmit in 30-second bursts enough coded information 
to listening posts in Switzerland, Spain, or Argentina to form a 
continuous line of instructions. 

Meanwhile, General Mueller was taking steps to establish 
escape routes for officers and soldiers of the SS who wanted to 
leave Germany to start a new life in South America. Some were 
listed by the Nuremberg authorities as war criminals; most were 
not. But they had in common the desire to begin again — far 
away. Mueller talked over his plans with Bormann. The first 
route considered was referred to as Organization der ehemaligen 
SS-Angehorigen— Organization of former SS members— and thus 
became known as ODESSA. Mueller estimated the annual cost 
of this operation, and Bormann, ever the banker, suggested that 
ODESSA be set up as a corporation and funded accordingly. 
The prime purpose of this corporation was to move SS men out 
of Germany to South America, or to the Middle East if they 
preferred it that way. To amortize the heavy cost, Bormann 
suggested the corporation also assume functions that would 
make ODESSA self-liquidating, at a profit. 

As ODESSA would not operate as an escape route for much 
more than five years, Bormann suggested that the SS adminis- 
trators picked to coordinate and supervise the route also keep 
their eyes peeled for quick-money opportunities, with a view to 
returning the initial investment and having ODESSA operating 
in the black. Bormann suggested that surplus arms was a likely 
field of opportunity, and as usual he was right. One British scrap 
dealer had become a millionaire in one year buying up old tanks, 



193 



trucks, and assorted guns; selling some as scrap, reconditioning 
others for sale on the arms black market of those days. The 
British government began selling its surpluses openly. Other 
munitions dealers blossomed into prosperity and respectability 
as they bid low for high-cost items. 

But none were to achieve the profitability of ODESSA, whose 
agents ranged throughout Europe and even behind the Iron 
Curtain. They bought and sold surplus American arms to Arab 
buyers seeking to strengthen the military capabilities of Egypt 
and other Middle Eastern Arab nations. Palestine was to be 
partitioned into a Jewish homeland, and they intended to 
destroy it at birth. But now Jewish buyers, funded from America 
and elsewhere, entered the marketplace. They were barred from 
purchasing guns and American surplus P-51 Mustang fighter 
planes by President Truman, and their only recourse for survival 
was to trade on the European black market, which, unknown to 
them, was coming rapidly under the control of ODESSA agents. 
However, the Jewish agency's buyers might have purchased from 
the devil himself if it meant survival of the small, defenseless 
nation, just come into being on May 14, 1947. The first pur- 
chase they made was in Czechoslovakia: 4,300 rifles, 200 medium 
machine guns with ammunition. Also acquired were ten surplus 
Messerschmitt-109 fighter planes for $44,000 each, which in- 
cluded some spare parts, cannon, machine guns, bombs, and 
assorted ammunition. ODESSA agents handled this transaction 
in Prague, with the tacit permission of Moscow, which was to 
sponsor Israel as a homeland for Jews in the United Nations. 
Russia wanted British influence dissipated in the Middle East, 
and one way to do this was to get their foot in the door of the 
new Israel. Hence their sub rosa cooperation in Prague. The 
German agents wanted only to serve as "honest brokers" in an 
international arms deal. 

With the German fighter plane deal consummated, it was up 
to the Jewish buyers to get the planes to their new homeland. 
Messerschmitts have a range of only 400 miles, so flying them 
down to Palestine was out of the question. They might have 
refueled in Yugoslavia and Greece, but the British were being 
sticky about transport of unauthorized arms, and closed down 
this possibility. As a result, a former German airbase near the 
Sudetenland town of Zatac (formerly Saaz) became for a few 



194 



weeks a Jewish airfield. Here two C-54 cargo planes flown by 
American contract pilots touched down, and Czech mechanics 
dismantled the fighter planes and stowed them into the big 
cargo aircraft, which thereupon took off for an airfield close by 
Tel Aviv. The operation was repeated many times over, until all 
ten fighters had been transported to Israel. The success of the 
airlift convinced David Ben-Gurion, who was to become the 
first prime minister of Israel, that the option taken on 15 more 
planes should be exercised. 

But money was short, and the ODESSA representatives had 
to be paid immediately, else the delicate negotiations hanging 
fire behind this Iron Curtain country would disintegrate. The 
Moscow representatives were becoming edgy, the Czechs who 
were fronting the negotiations were wondering when Russia 
might change its mind and wreak retribution on them, and the 
fellows from Germany felt that if there was undue delay the 
deal would collapse and they would go down with it. An appeal 
for quick money was made by the Jewish buyers to Teddy 
Kollek, in New York, the operational chief of the Jewish groups 
in the United States. (Kollek, incidentally, was much later to 
become mayor of Jerusalem-in 1965.) He went to Manhasset 
on Long Island and met with William Levitt, the famed builder 
of many suburban Levittowns. 'We need money," Kollek said. 
"I can't tell you what it's for because it's top secret. But if you 
lend us the money, the Provisional Government of the State of 
Israel will give you a note and pay you back in a year." 

"So," Levitt recalls, "I said O.K., and I gave him the million 
dollars." 

At their hotel in Zatac, renamed the Hotel Stalingrad, the air 
crews waited for news. It arrived, and during the ensuing days 
of feverish activity on the airstrip, the 15 Messerschmitt-109s 
were flown out of Zatac under the code "Operation Balak," or 
"Son of Bird," a Hebrew historical reference. Egyptian forces 
in brigade strength advanced on Tel Aviv in 1947, but were 
halted 25 miles from the new capital by the sudden appearance 
of Messerschmitt fighter planes that strafed and bombed their 
columns, and by artillery fire from 65-mm mountain guns 
bought from Nazi stockpiles and shipped clandestinely from 
Marseilles. The danger of a quick Egyptian victory had been 
cut short; the new State of Israel would survive. 



195 



But would Martin Bormann survive if he left his modest sanc- 
tuary in northwest Germany? The administrators of ODESSA, 
aside from their role as short-term munitions merchants that 
they were later to segue into other commercial activities, were 
confident that they could get Party Minister Bormann right 
across Germany to Munich and over the Alps to Genoa. They 
had already moved several thousand SS men by this under- 
ground railroad, and thus far everything had gone according to 
schedule. "Safe houses" had been established along the route, 
and the travelers always arrived and departed on time. By the 
time the first Nuremberg trial had ended in early 1946, Bor- 
mann was ready for progress. General Mueller had him con- 
veyed to another safe house near Domstedt. Griesheim- 
Domstedt was and still is the publishing center for the U.S. 
Army's Stars & Stripes newspaper for Europe. The late editions 
go to press at midnight, and shortly thereafter trucks, operated 
exclusively by the Stars & Stripes command, line up for their 
bundles of newspapers that must be distributed by morning to 
all U.S. Army bases. In 1946 it was a simple matter for Mueller 
to arrange for Bormann to be a casual passenger aboard such a 
truck, which halted briefly as it turned out of the publishing 
plant and picked him up. Accelerating, it turned onto the Auto- 
bahn, then drove straight to Munich. Just before reaching U.S. 
Army headquarters, the German driver slowed to a stop and 
Bormann jumped out, disappearing into the downtown area of 
the city. He reached a safe house, where his brother Albert had 
been waiting; they remained there quietly, awaiting further 
instructions. 

Bormann left Munich with an SS companion and guide, by 
automobile provided by a German mayor who was able to get 
rationed gasoline. In the pastoral uplands of Bavaria they parked 
the car at a previously agreed-on point, so the mayor could 
fetch it and drive it back. Bormann had been advised that it 
was best to travel on foot beyond this point in order to avoid 
interception and interrogation by U.S. CIC patrols. So the pair 
took to the countryside on foot and headed toward the Austrian 
Tirol. Their appearance was quite commonplace; few gave them 
more than a glance. The spring before millions of refugees and 
displaced persons had swarmed across Germany, prisoners of all 



196 



nationalities making their way home, more than a million Ger- 
man families from the East fleeing before the Red Army into 
western Germany. The Wehrmacht had disintegrated into long 
columns of prisoners walking toward prisoner-of-war camps. 
Mass chaos had characterized 1945, but now in the winter and 
spring of 1946 some order appeared; however, plodding men 
and women, Red Cross vehicles, and fast-driving U.S. Army 
trucks were familiar sights in the area beyond Munich. The two 
men made their way up mountain roads and across valleys, and 
no attention was paid to them by the civilians trying to farm 
their patches or cut firewood in the forests. 

Bormann and his companion crossed the Inn River, and were 
guided by local SS mountaineers to the Alpine village of Naud- 
ers, where the Austrian, Swiss, and Italian frontiers meet. The 
two rested in a safe house for several days, then set out on the 
next stage of the journey, which took them through Val di 
Adige and down to the green forestlands that line Lake Gardia. 
Here they halted for rest in the monastery overlooking the lake, 
feeling relatively safe. After a time they pushed on to a Fran- 
ciscan monastery in Genoa, where arrangements to receive them 
had been made by Heinrich Mueller. 

New identification papers were handed to Bormann, together 
with the welcome news that in a matter of days he would be 
sailing to Spain. When he left the Franciscan monastery in 
Genoa and boarded a small Mediterranean steamer, his first 
stop was the port of Tarragona, to the south of Barcelona. It 
was night when the small vessel put into port, debarked the 
passenger, and steamed from the harbor. Bormann was met by 
two of Mueller's SS men, who promptly drove the party min- 
ister along the coast to Vendrell, where they picked up the 
auto route and headed inland. It was the purest scenic beauty 
that Bormann saw as they drove swiftly, with no stops other 
than to refill the gas tank from jerry cans they carried. They 
risked no appearance in a public place. Somewhat across the 
neck of Spain they turned off at Todela, and continued over 
good secondary roads until the mountainous area of Logrono 
was reached. They passed Najera, then finally reached their 
destination, the Dominican monastery of San Domingo, which 
stands in the Province of Galicia, once called home by General 



197 



Franco. Preparations had been made for an indefinite stay. Bor- 
mann thanked his SS comrades, and they stood erect and 
saluted as in the past; then they departed. 

The route to freedom taken by Bormann was not exactly that 
of other SS escapees. His clandestine departure from Germany 
had been calculated according to his special needs by Mueller, 
with SS men in civilian clothes positioned all along the way. 
They were the advance lookouts, sworn to the protection of 
their Party Minister, the duly appointed successor to Adolf 
Hitler. At no time in his trek between Munich and Genoa was 
Bormann out of sight of the finest riflemen the Waffen SS had 
developed in six years of war. They manned the safe houses, 
they skied the ridges overlooking the valleys to be traversed by 
Bormann, and they were chopping wood or hiking deep in the 
pine forests as the two trudged on toward safety. The paths 
followed by other SS members on the ODESSA route always 
led toward the Austrian Tirol; the precise route into Italy de- 
pended on the time of year and the pattern of search being 
conducted by Allied patrols at any particular time. Once in 
Genoa, the flow of former SS comrades was directed toward the 
harbor, where they would board boats of various descriptions. 
When a captain had a full consignment, he would lift anchor 
on his chartered boat and head for the Straits of Gibraltar. 
Once through the British bastion he changed course and 
steamed slowly along the Portuguese coast, rounding the north- 
west part of the Iberian peninsula at Cape Ortegal, at last 
dropping anchor in the beautiful harbor of San Sebastian, where 
his cargo of SS emigrants would file ashore. It was a short voy- 
age, which was repeated by many vessels many, many times, for 
the flow of SS men was seemingly unending. 

General Mueller had a second major escape route, which took 
some of the pressure off the above described course. ODESSA 
had the notoriety and the spotlight of sorts, also the status of a 
commercial self-liquidating corporation, but another version of 
this underground railway ran across France and over the Pyr- 
enees. It was referred to as Deutsche Hilfsverein —German Re- 
lief Organization— and, although it had been set up hurriedly in 
1945, it performed an enormously valuable service for the SS 
men who traversed it. It was not self-liquidating like ODESSA, 
and the money to run it came directly from SS funds, a source 



198 



separate from that controlled directly by Bormann, although SS 
and party money sent to South America had been melded into 
one solid treasure and the bank accounts that required Bor- 
mann's approval at a later date produced friction between 
Bormann and Mueller, for in times to come distribution of 
money was a prime matter on the NSDAP agenda in South 
America. 

With the war in Europe at an end, the struggle for Indochina 
flared up, and the French began recruiting unemployed German 
soldiers for their armies in the land later to be known as Viet- 
nam. In the chaos of 1945 the only negotiable skill many a 
German ex-soldier had was training in warfare. The French 
were in the market for that, and set up recruiting stations in 
Metz for their Foreign Legion. Former German soldiers flocked 
to sign up for a stretch of soldiering in French Indochina. The 
situation was exactly right for General Mueller and his associ- 
ates. They intermingled their SS veterans with the ordinary 
Wehrmacht recruits; thus, on every French truck headed south 
in convoy were many SS men. All had new papers provided by 
the SS documentation section, and now they also carried French 
enlistment papers that enabled them to cross France with im- 
punity. The truck convoys would go to Bordeaux or Marseilles, 
depending on French shipping conditions, the ultimate destina- 
tion being North Africa, where training would begin. However, 
once in either of the French port cities, the SS men would skip 
away from the truck convoys and be guided by French police- 
men to a new departure point. These were the police who had 
worked during four years of occupation for Mueller and the 
Gestapo and they were still loyal, particularly so when the effort 
expended was minimal and the under-the-table pay was high. 
If a Foreign Legion truck convoy was destined for Bordeaux, the 
SS men would be guided over the Pyrenees, and through coastal 
towns to San Sebastian. If the destination, on the other hand, 
was Marseilles, they would be placed aboard small fishing boats 
that would round the Iberian peninsula and land them at San 
Sebastian, the terminal point for both ODESSA and Deutsche 
Hilfsverein. Here they waited for the next stage of their move- 
ment, which was overland to the small port of Vigo on the 
northwest coast of Spain, due west of Redondela. It was an 
emotional sight for SS men awaiting departure to see on the 



199 



horizon the appearance of the chartered transatlantic freighters 
that were to bear them to exile in Buenos Aires. Ten thousand 
SS officers and soldiers passed along this way. But the number 
of Germans who went to South America, both along these two 
routes and by less organized means after Martin Bormann had 
declared his flight capital program in August 1944, totaled 
60,000, including scientists and administrators at all levels, as 
well as the former SS soldiers commanded by General Mueller. 

The most unsavory SS officer to take advantage of ODESSA 
was Adolf Eichmann. It was in 1950 that he made contact with 
the organization, which saw that he reached Genoa safely; here 
he received a refugee passport in the name of Ricardo Klement 
along with a visa for Argentina. The Nuremberg Trials had 
thoroughly frightened him. He testified later, "My name was 
mentioned several times there, and I was afraid there might be 
more thorough investigations which would reveal my identity. 
I became particularly alarmed after Dieter Wisliceny's testi- 
mony, which leveled all kinds of accusations against me." Eich- 
mann had been taken prisoner of war by American soldiers at 
the beginning of August 1945, giving his name as Waffen SS 
officer Otto Echmann. With his true name receiving such 
prominence at Nuremberg, Eichmann spoke with Lieutenant 
Colonel Offenbach, senior German officer of the prisoners of 
war. Eichmann requested authority to escape, and a meeting 
of officers was called to deliberate this; they approved it. They 
helped Eichmann by giving him new identification papers in 
the name of Otto Heninger, and one of the officers handed him 
a note to his brother in Kulmbach, recommending that he find 
Eichmann a job in forestry. Eichmann escaped and arrived in 
Celle early in March 1946, where he stayed, working as a 
forester for four years. But his name was continually mentioned 
as the monstrosity of his crimes emerged. An odd sidebar to this 
bit of sad history is the fact that Heinrich Mueller, who had 
been recruited into the Gestapo by Reinhard Heydrich from his 
position as inspector of detectives in Munich, had first been 
assigned to the Jewish desk in Berlin. Mueller was a professional 
detective and wanted no part of the Jewish problem. He was 
working in his modest office in Gestapo headquarters when this 
self-effacing lieutenant entered who had recently been assigned 
to the Gestapo and was looking around for something to do. 



200 



Mueller, on the job only three days, immediately told Lieuten- 
ant Eichmann that the Jewish desk was his permanent 
assignment, then left for lunch, relieved, and very pleased with 
this turn of events. 

Adolf Eichmann in 1950 did not use the port of Vigo to 
escape. That means had wound down, and he set sail for Argen- 
tina on the Italian ship Giovanna C, arriving in Buenos Aires 
in the middle of July 1950. Unlike many fleeing Nazis, he 
reached Argentina with scant funds. He went from job to job, 
after running a laundry in the Olivas quarter of Buenos Aires 
that shortly went bankrupt. Through his Nazi connections he 
obtained a position with the German banking firm of Fuldner y 
Compania, at 374 Avenida Cordoba in Buenos Aires. This firm 
had established a subsidiary known as CAPRI— Industrial Plan- 
ning and Development Company —to develop hydroelectric 
power in the Tucamin region in the outskirts of Buenos Aires, 
and Eichman was transferred there. From Austria his wife Vera 
and their three sons joined him in 1952; a fourth son was born 
in Argentina. A friend of Eichman/Klement who knew his real 
identity prodded him to shift to Bolivia and work for the state 
security services in that country. Eichmann is said to have re- 
sponded, "When I hear those words 'state security services,' my 
appetite for killing is whetted all over again." In 1960 he was 
captured at dusk outside his modest house in the San Fernando 
district of Buenos Aires by the feared Mossad, and transported 
on an El Al passenger plane to Tel Aviv, there to stand trial at 
last for crimes against humanity. After imposition of the death 
penalty, his remains were cremated, with the ashes scattered 
over the Mediterranean. He had confided to Israeli interrogators 
that he assumed his presence in South America had been leaked, 
that he had been betrayed to distract attention from the pur- 
suit of higher-ups, and it is likely that he was right, for his 
continuing notoriety in the newspapers of the world was dis- 
concerting to Nazi leadership in South America. They were 
leading a well-ordered life, and wanted to keep it that way. 
During the uproar in 1960 and the trial that followed in Tel 
Aviv, there was considerable friction between the Jewish and 
German communities in Buenos Aires, but it finally tapered 
off, with a mutually accepted feeling that it had all been for the 
best. 



201 



But back in early 1947 a German of immense notoriety and 
importance waited his voyage to freedom. Martin Bormann, in 
the Dominican monastery of San Domingo, chafed under the 
constraint. Finally, the ship arrived to take him to South Amer- 
ica, and he made his way at night to the harbor of Vigo. A 
rather sizeable freighter had been loaded with produce and 
other foodstuffs of Spain and with the most recent contingent 
of fleeing SS men. The last aboard was Party Minister Bormann, 
who went directly to the modest suite reserved for him. He 
watched the hills of Spain recede in the distance, and thought 
wistfully that this was the last view he might ever have of the 
European continent. Certainly he would not be returning to this 
province of Galicia, where many fascists who had fled France 
and Belgium now resided in exile, such as Leon Degrelle, once 
the leader of the movement "Rex," who dwelled in a house in 
the mountains of Asturi, overlooking San Sebastian. 

A strange footnote to the true tale of Bormann's stay in the 
Dominican monastery of San Domingo is the suspect fire that 
destroyed the archives in 1969. Mueller, ever the supercautious 
protector, became aware that Israeli agents were backtracking 
Bormann's escape route. I have been told they wanted to dis- 
cover what Catholic priests and bishops might have aided Bor- 
mann in his escape, intending to use this information to 
embarrass the Vatican. The only evidence of record that Bor- 
mann had been sheltered in this Dominican monastery was the 
Book of Visitors he had signed the night he arrived. Twenty- 
three years later fire broke out in the very shelves where this 
book was kept, and all was burned up. 

When the large freighter carrying Bormann and a contingent 
of SS officers and soldiers steamed into the harbor of Buenos 
Aires in the winter of 1947, the anchor was dropped in the 
waters of the south quay near Riachuelo, one of the tributaries 
of the La Plata, named by the conquistadores for what it means, 
"silver." The ship did not come close to the piers, where enor- 
mous cranes and swarming dockworkers unload cargoes, but as 
dusk fell a small fleet of boats began ferrying the passengers 
and their belongings to shore. At sea, each SS man had been 
supplied with new identity cards, courtesy of the skilled en- 
gravers of Concentration Camp Sachsenhausen, passports bear- 
ing appropriate visas, and written instructions as to where each 



202 



was to stay once ashore. Some were dispatched to rooming 
houses and others to obscure hotels, while still others traveled 
by public transportation to inland cities and towns, or even to 
adjoining countries. Jobs had been found for all, either in the 
companies Bormann had established in 1944 and 1945 or in 
older German corporations that had been doing business in 
Latin America for a number of years. All those who debarked 
from the vessel either had with them or were issued a modest 
sum of cash, sufficient to carry them until the first payday. None 
of them actually saw Bormann on the ship, save for the captain 
and several Nazi VIPs who came aboard the night of arrival. 
Their reception was warm and friendly, and the local NSDAP 
leaders knew that they were speaking with the official successor 
to Adolf Hitler, the Party Minister and Reichsleiter whose or- 
ders they would obey implicitly in the years ahead. 

Martin Bormann entered a country with a political climate 
favorable to him. Argentina had been under the dictatorial gov- 
ernance of Juan Peron ever since he and his associates had been 
victorious in a historic coup on June 4, 1943; then, in June 1947, 
he was voted by an overwhelming majority into power, despite 
the intense and overt opposition of the United States. He was 
to be driven from the presidency and from Argentina in Sep- 
tember 1955, but in the interim years he did more for the ordi- 
nary man, the "shirtless ones," than had any leader in Argentine 
history. While doing all this good he banked an illicitly derived 
fortune in Switzerland, estimated by reliable sources as around 
$500 million, of which around $100 million was thanks to the 
Bormann organization. He was a charismatic figure, as presi- 
dent and in exile in Madrid, and was returned to power in 1973, 
a year before his death in 1974. In this country of 22 million, 
Italy and Spain have contributed the most immigrants, followed 
by Britain, Poland, France, Russia, and Germany. There are 
also in Argentina 700,000 Lebanese and 450,000 Jews, but it 
was the British who achieved economic dominance, at least un- 
til Peron came to power, investing as they did in shipping, bank- 
ing, insurance, and the railways. British influence declined under 
Peron. He expropriated the British-owned railways, paying £150 
million, bought out American telephone interests for $100 mil- 
lion, and nationalized the airlines, shipping, and local trans- 



203 



portation. As British influence declined, German authority 
increased. Peron was for Adolf Hitler all the way, believing until 
the last that the Axis powers would win the war. His private 
secretary was German, the son of a Nazi, and throughout his 
time of power he felt most at ease with Germans. Because of 
his admiration of Hitler, he learned German while a young 
military attache in Italy: his purpose was to be able to read 
Mein Kampf'm the original. 

The influx of German industry and investment boosted the 
Argentine economy, and the new German money flowing into 
the German-controlled banks in Buenos Aires for safekeeping 
and profitable investment under the Bormann flight capital 
program indicated to Peron that a new prosperity lay ahead for 
his country. The arrival of Martin Bormann in person was an 
event of significance to him, and in low-key meetings with Hit- 
ler's successor both agreed to work for the development of a 
new, modern Argentina. Peron was obviously fascinated at 
hearing firsthand all about the last days of Adolf Hitler, and he 
remarked to a confidant that here was a fellow who could still 
do much in the years ahead for German prosperity as he prom- 
ised to do for Argentina. Both realized that the capture of 
Bormann was a clear and ever present danger, and so Peron 
instructed the chief of his secret police to give all possible 
cooperation to Heinrich Mueller in his task of protecting the 
party minister, a collaboration that continued for years. It be- 
came somewhat frayed around the edges after Peron left for 
Panama and then exile in Madrid in 1955, but Mueller today 
still wields power with the Argentinian secret police in all mat- 
ters concerning Germans and the NSDAP in South America. 

On June 16, 1948, President Truman became involved in the 
hunt for Martin Bormann. Robert H. Jackson, who had once 
taken a leave from the Supreme Court to serve as U.S. chief 
prosecutor at the Nuremberg trials, wrote to the president that 
a quiet search should be made by the FBI for Bormann in South 
America. 

"My suggestion, therefore," he wrote, "is that the FBI be 
authorized to pursue thoroughly discreet inquiries of a prelimi- 
nary nature in South America. ... I have submitted this sum- 
mary to Mr. Hoover and am authorized to say that it meets 



204 



with his approval. You may inform him of your wishes directly 
or through me, as you prefer." 

The presidential authorization was given, and John Edgar 
Hoover assigned the investigation to his most experienced and 
skillful agent in South America, who proved that he was just 
that by eventually obtaining copies of the Martin Bormann file 
that were being held under strict secrecy by Argentina's Min- 
ister of the Interior in the Central de Intelligencia. When the 
file (now in my possession) was received at FBI headquarters, 
it revealed that the Reichsleiter had indeed been tracked 
for years. One report covered his wherabouts from 1948 to 1961, 
in Argentina, Paraguay, Brazil and Chile. The file revealed that 
he had been banking under his own name from his office in 
Germany in Deutsche Bank of Buenos Aires since 1941; that 
he held one joint account with the Argentinian dictator Juan 
Peron, and on August 4, 5, and 14, 1967, had written checks on 
demand accounts in First National City Bank (Overseas Divi- 
sion) of New York, The Chase Manhattan Bank, and Manu- 
facturers Hanover Trust Co., all cleared through Deutsche Bank 
of Buenos Aires. 

The surveillance report of Martin Bormann's movements 
stated the following, in brief: 

SPECIAL INFORMATION BULLETIN 



MARTIN BORMANN 

German Nazi politician, born in 1900, in Halberstadt, Magdeburg, 
Germany. Titular head of the National Socialist party. The Nurem- 
berg War Crimes Tribunal sentenced him to death, along with 
other criminals of the Third Reich. Came to Argentina in a clandes- 
tine manner, disguised as a Jesuit priest, arriving from Genoa, Italy, 
with false papers, around 1948. 

CASE CHRONOLOGY 

1948 

Bormann was seen and identified in the federal capital. (Informa- 
tion given by Doctor Pino Frezza, an Italian doctor who met Bor- 



205 



mann on an occasion when Bormann accompanied the Fiihrer — 
S.I.R. No. 0318.) Bormann made contact with a former German 
army officer at the ABC Brewery, at 500 Lavalle Street, in the 
federal capital. (S.I.R. 01319. Juan Felisiak.) 

1951 

Bormann went to Parana, in Entre Rfos province, where he was 
once again interviewed by the engineer Juan Felisiak, during a brief 
trip Felisiak made to Entre Rfos Province, where Bormann was 
concealing himself by mixing with the abundant colony of Germans, 
Croatians, and Poles. 

The same year, he went to Brazil. Existing versions show that he 
situated himself in the impenetrable jungle in Mato Grosso. In his 
comings and goings in Argentina, he used various pseudonyms, one 
of them being Juan Gomez. Under the cover of this name, in 1948, 
Martin Bormann received the bulk of the treasure that had made 
up the financial reserve of the Deutsche Bank, whose last owner, 
Ludwig Freude, had died of poisoning. Other pseudonyms were 
Jose Perez, Eliezer Goldstein, and Bauer. (Report S.I.R. No. [?] 320, 
Tadeo Karlikosky.) 

Martin Bormann had various children, one of whom, an ordained 
Jesuit priest, helped his father in his escape from Germany, even 
going so far as to claim that Martin Bormann had died in 1945 — a 
lie calculated to interfere with the search for the war criminal. 

It is known that even though Martin Bormann divided his per- 
manent residence more or less between the states of Mato Grosso 
and Santa Catalina in Brazil, he made frequent brief trips to various 
localities, such as Paraguay; Valdivia, Chile; and Bariloche and 
Asochinga, Argentina. In the last-mentioned place, in the province 
of Cordoba, he made contact with the central command of Arana, 
an organization founded in a distant prisoner-of-war camp, among 
German prisoners, for the purpose of providing aid and protection 
to Nazis throughout the world and resurrecting the "ideal" of 
national socialism. 

1953/54/55 and 56: 

In this last year, he was identified by a woman in Sao Paulo, Brazil. 
He visited Bariloche once. 

1957 

Bormann stayed in Brazil and curtailed his travels to Argentina, 
because in that year Israeli agents began infiltrating the last- 
mentioned country in search of war criminals, who by now had 
begun to lose some of the support they once enjoyed. 



206 



1958/59 

Bormann is now living on a solitary farm near Curitiba, Brazil. 
1961 

In this year, using the pseudonym Bauer, he attended the Ali Baba 
nightclub in Asuncion, Paraguay, apparently in the company of 
Mengele. 

He was now lost to sight, disappearing into the area known as 
Swiss Chile. More or less bounded by the Pacific Ocean, the Argen- 
tine border, and the cities of Valdivia, Chile, and Bariloche, Argen- 
tina. 



SPECIAL INFORMATION BULLETIN NUMBER 3 



MARTIN BORMANN 

He was born in Halberstadt, in the district of Magdeburg, Ger- 
many. He was leader of the Nazi party council. The Nuremberg 
War Crimes Tribunal sentenced him to death. 

He had various sons, one of whom, an ordained Jesuit, circulated 
the story of Bormann's death in 1945, a lie calculated to put an end 
to any search for the criminal. 

His birth was registered in the year 1900. He was considered 
Adolf Hitler's right-hand man and was mentioned as a possible 
successor to Hitler, when the conflict ended. 

Like other fugitives, he entered Argentina in 1948, coming from 
Genoa on a second-class ticket, with forged Vatican documentation. 
(This had all been made possible by an organization called La 
Esclusa, which facilitated the exit of various fugitives.) 

Between 1943 and 1945, Martin Bormann had maintained con- 
tacts with Heinrich Doerge (councilor of the Central Bank of 
Argentina), Ricardo Von Leute (Director of the German. Trans- 
Atlantic Bank), Ricard Staud, and Ludwig Freude — names assoc- 
ciated with the annals of Nazi treasure. 

At the end of 1943, Martin Bormann prepared to put into force 
Operation Tierra Del Fuego, which involved transporting large 
quantities of gold, money, stocks, paintings, and other works of 
art to Argentina via submarine. However, owing to the staggering 
situation of the German armies, all terrestrial routes were cut off. 
Bormann therefore (counting on the collaboration of the Argentine 
government) decided that the transfer of this treasure should be 



207 



accomplished via night flights from Berlin to Madrid and thence to 
Buenos Aires. (Even after the fall of Germany, submarines arrived 
at Mar de Plata and the vicinity of Patagonia and unloaded mys- 
terious merchandise.) 

At one point, Martin Bormann slipped his diary into the pocket of 
a cadaver, in an attempt to create the impression that he was 
dead. The subterfuge was discovered, however. 

In 1948, it was noted that he passed through Buenos Aires. Ac- 
cording to reports DAE 356/48 and DAE 481/50, he was observed 
in the street, when he ran into Doctor Pino Frezza, who recognized 
him, having met him in Germany (to be precise, in Berlin, during 
Hitler's visit to a brewery). The person who reported observing this 
chance meeting was an engineer, Juan Felisiak. The meeting took 
place at 500 Lavalle Street. 

Later he went to the city of Parana, where Jan Felisiak saw 
him again. In Parana he called himself David. He stayed there 
until 1951. 

Bormann moved to Santa Catarina, Brazil, where he used the 
pseudonym Eliezer Goldstein. Here, he was intensely active co- 
ordinating the activities of the German colonists in Paraguay, 
Argentina, and Brazil. However, all indications are that his per- 
manent residence is at Mato Grosso, where a large number of 
fugitives, refugees, and delinquents live. This is where Martin 
Bormann maintains contacts with couriers of the well-known organi- 
zation called La Arana, which is dedicated to providing help for all 
Nazi fugitives. In fact, Bormann is known as the Fiihrer of South 
America, since, according to various versions, he made it possible 
for the Nazis to salvage a great deal of money, gold, valuable objects, 
and works of art, with the result that fugitives who escaped from 
the tribunals and prisons of Europe are able to live without major 
difficulty. 

At the end of 1954, Martin Bormann was seen in Mina Clavera, 
Cordoba, in the company of two men with Spanish surnames. He 
was calling himself Jose Perez. He arrived at the hotel in Mina 
Clavero suffering from stomach problems and requested that the 
hotel manager bring him medicine for gastritis. One of his com- 
panions, named Jimenez, made a trip to Ri'o Zeballos with the owner 
of the hotel. He took certain documents with him, and once there, he 
received documents for Martin Bormann-Perez. 

The hotel manager overheard some conversations, in which the 
names of the cities of Bariloche [Argentina], Valdiva [Chile], and 
Sao Paulo [Brazil] were mentioned. Later, when he handed "Perez" 
a glass of milk, the hotel manager realized that this was actually 



208 



Martin Bormann. The hotel proprietor began to think that these 
people must have very important characters backing them, so he 
made the circumstance known to an agent of the S.I.R. (Cordoba 
sector) and went with the agent to Ri o Zeballos, where Bormann 
and his friends were headed. 

With the fall of the Peronista government, an evident gathering 
of the Nazi element began to descend on Chile, Paraguay, and 
Brazil, particularly Brazil. So it was that in 1956 Martin Bormann 
was in Sao Paulo, where a large number of addicts of the Nazi 
philosophy were gathering, little knowing that they would not find 
here the accommodation they had so long enjoyed in Argentina. 

In Sao Paulo, Bormann linked up with members of the Odessa 
organization, which existed to give aid to former SS soldiers. Odessa 
was a branch of La Arana. 

Martin Bormann now adopted the name Goldstein. He tried to 
hide permanently, since Jewish elements were frequently around, 
painstakingly looking for Nazi war criminals who were attempting 
to elude justice. 

In the streets of Sao Paulo, Martin Bormann was recognized by 
a woman who knew him, so he rapidly left the city and the Nazi 
group that was developing power in the triangle of Argentina, Para- 
guay, and Brazil. 

In 1957, he was seen in the city of Bariloche, where again he 
was developing and coordinating Nazi activities. He always hid under 
a Jewish last name, to escape the attention of the Israeli commandos, 
who operated more freely in Argentina now that the Nazis no 
longer enjoyed the support they had had during the Peronista era. 

From Bariloche, Bormann went to Valdivia, apparently to acquire 
a farm or to establish contact with a secret Nazi organization that 
operated in the south of Chile. 

In 1958, Bormann stayed at his secure residence in Mato Grosso, 
but the following year he went to Paraguay, where a former Wer- 
macht member observed him in a meeting with Doctor Josef Men- 
gele, a Nazi who practiced medicine in Argentina and who, like 
Bormann, was sought by the Israeli secret services. This meeting 
took place in Hohenau, a town practically founded by German 
colonists in this zone. 

Bormann and Mengele headed for Asuncion, Paraguay, because 
Bormann was ill. His health became worse, and a doctor was called. 
Doctor Otto Biss, a resident of Asuncion, examined Bormann and 
Mengele. He observed that Bormann had a scar on his forehead 
and that, other than a recurrence of his gastritis, he was in good 
health. This is how it was established that Bormann was in Paraguay, 



209 



well guarded by Colonel Arganas, who controlled all the contraband 
operations between Asuncion and Sao Paulo — operations conducted 
by former German flyers. 

In 1961, Bormann went from Mato Grosso to the city of Iguazu, 
staying at the house of a former SS soldier. He stayed scarcely three 
days, since he never stayed in one place for long. He didn't trust 
anyone and nearly always traveled alone, seldom with a companion. 

During the following years, apparently, the trail of Bormann was 
lost, even though there was always news of the activities of Doctor 
Mengele in Paraguay, where he developed intense activities. The 
situation with Bormann was quite different — he could rely on the 
enormous amounts of money he had invested in different firms, and 
therefore, he didn't have to work and could concentrate his efforts 
on staying hidden, protecting himself, and continuing to encourage 
the Nazi ideology. All those who had the opportunity to meet him 
agree that Bormann was a notably astute man. 

It was evident that since the capture of Adolf Eichmann, another 
Nazi criminal, the activities of Jewish groups were intensifying. 

In 1964, Bormann was again seen, in the area of Villa Ballester, 
at a brewery frequently visited by Germans. The informant in this 
case was T. Karlokowski, a well-known swindler who sold bogus 
gold coins. Karlokowski used to travel among these neighboring 
countries, and therefore, he was able to find out that Josef Mengele 
was well protected by Colonel Arganas of the Paraguayan army and 
that he was involved in selling agricultural machinery. 

Karlokowski found out that it had been a long time since Mengele 
had seen Bormann. On an unusual occasion, however, the engineer 
Juan Felisiak, a friend of Karlokowski, told him that Bormann was 
in Villa Ballester. Karlokowski proposed a business deal with 
Bormann, since he had plenty of money, but the engineer was not 
agreeable. 

In that event, they ultimately found themselves at the same 
brewery when Goldstein (evidently Bormann) appeared. He was 
accompanied by a young blond man, apparently a German. The 
salutations were short. Bormann said that on the following day they 
were heading south again, to a farm in Patagonia. 

Again, Bormann's trail was lost. In 1968 he turned up in the 
medical offices of Doctor Francisco Ubistondo, on Arenales and 
Pueyrredon Streets. He was suffering with hepatitis-related pain. 
When Doctor Urbistondo commented on the German's case with 
the informant Zuccarelli, the latter reported it to agent Rodriguez. 
Rodriguez showed a photograph of Bormann and Mengele to the 



210 



doctor, who identified Bormann as the sick man he had attended in 
his consulting office. 

But his movements in more detail, as reported to me by trust- 
worthy confidants, showed that Martin Bormann remained for 
only a short time in Buenos Aires. He moved to a mountain 
retreat in the Argentinian Andes, a 5,000-acre cattle and sheep 
ranch about 60 miles south of San Carlos de Bariloche, and 
lived there until Juan Peron was forced from power in 1955. 
At that time Mueller thought it advisable for Bormann to leave 
the mountain hideaway, so the party minister was transported 
over the Andes to Chile to another remote house for two years. 
Throughout this period, Mueller kept receiving information 
that Bormann continued to be the object of an international 
manhunt. British, American, and West German agents sought 
him, but not too hard. The Bormann organization had many 
commercial and political links to the capitals of these three 
nations, and real clout was available should the chase become 
too hot. The CIA could have pulled aside the gray curtain that 
obscured Bormann— at any time. But the CIA and Mueller's 
crack organization of former SS men found it to their mutual 
advantage to cooperate in many situations. There is no morality 
in the sense that most of us know it in the strange world of 
professional secrecy, and when it was to the advantage of each 
to work together they did so. For example, Klaus Altman, the 
so-called Hangman of Lyon, France, was recognized in Lima, 
Peru, as Klaus Barbie by a Frenchwoman who has made a career 
of pursuing Nazis, although she was only five years old at the 
time of the occupation when Altman-Barbie was an SS officer. 
Altman, upon his return to Bolivia, where he is a Bolivian citi- 
zen and director and stockholder of Transmaritime Boliviana, 
a shipping company partly owned by the Bolivian government, 
admitted that he was Klaus Barbie. But, he said, "I was an 
officer in a regular army in a formally declared war." He added 
that both American and French authorities had questioned him 
after the war, doing nothing to hinder his emigration to Bolivia 
in 1950. Yet he became a cause celebre after Mrs. Beate Klars- 
feld, an official of the International League Against Anti-Semi- 
tism and Racism, announced his identity. Georges Pompidou 
of France was then forced to become involved and to take a 



211 



stand, offering 14 million to the Bolivian government for the 
extradition of Barbie. It was refused. Barbie had participated as 
a Gestapo officer in the destruction of the two underground 
resistance networks, "Prosper" and "Scientist," in 1943, which 
resulted in the death of Jean Moulin, a French resistance hero. 
In South America, Altman-Barbie was under the protection of 
General Heinrich Mueller, and in certain instances had worked 
for the CIA, so his sponsorship was impeccable and incontro- 
vertible, and he continues to enjoy immunity from arrest. 

Mueller never leaves Latin America, but his agents roam the 
Americas and Europe. They provide protection for the NSDAP 
leadership in exile who can still manage to travel to Madrid, 
Sweden, Switzerland, France, Italy, or North Africa, and they 
have been known to take on lucrative secret police assignments. 
When Colonel Nasser became president of Egypt, he asked the 
CIA for assistance in establishing a similar organization in his 
country. The CIA did not wish to become involved, and so 
referred him to General Gehlen, then chief of the West Ger- 
man federal intelligence organization, which was in fact main- 
tained by the CIA. But Gehlen ducked the request, suggesting 
that former SS General Otto Skorzeny, son-in-law of Hjalmar 
Schacht, one-time Minister of Finance for Hitler, should be 
approached. Skorzeny, who made his headquarters in Spain, did 
not want the assignment either, for he was doing too well as an 
engineer and businessman in Spain, and was also owner of a 
large farming establishment outside of Dublin. But, urged by 
Schacht, he had Heinrich Mueller in Brazil send him a team of 
secret police specialists, who all arrived in Cairo as a German 
mission led by Skorzeny, who promptly returned to Spain after 
introductions had been made. Mueller's team established such 
an effective intelligence service for Nasser, known as the Gen- 
eral Intelligence Service, that Colonel Qadhafi of Libya, then 
the new revolutionary leader of his country, asked Nasser to 
make the German team of advisors available to him also. This 
was done, and upon arrival the Germans started with a thor- 
ough housecleaning of the Libyan secret police hired by the 
previous ruler, King Idris. Two thousand Libyan police were 
put in jail and continue to languish there today, and the Ger- 
mans rebuilt from scratch. Today Libyan intelligence agents 
are stationed in all Libyan African and overseas embassies and 



212 



consulates, and they are tough and ruthless., Perhaps as a quid 
pro quo to this service to Libya, the Colonel granted the West 
German rocket company Ortag rights to a vast test range 600 
miles south of Tripoli in 1980. An attitude of benevolence 
toward Bormann, the German who created so much commer- 
cial activity for them, is held by Brazil, Bolivia, Argentina, 
Uruguay, and Paraguay. In the last named country, the son of 
a Bavarian cavalry officer, President Stroessner, cooperates with 
the United States military authorities and with the CIA, as he 
does with Bormann and his representatives. During the Viet- 
nam war, President Stroessner permitted the U.S. Army Chemi- 
cal Corps to send in teams of 2,500 men and CIA agents to 
carry out field tests, in the Mato Grosso jungles of Paraguay, 
of chemicals for use in Vietnam. In one instance, several Ameri- 
can soldiers became casualties when they were accidentally 
sprayed with the gas. They were taken to a Paraguayan military 
field hospital; the doctor who treated them was Josef Mengele, 
now a Paraguayan citizen and an officer in the Paraguayan Army 
Medical Corps. Under Mengele's treatment all soldiers recov- 
ered. None, of course, knew the true identity of their medical 
benefactor. The Israelis have tried repeatedly to extradite Men- 
gele, who was the notorious doctor of Auschwitz concentration 
camp. But when President Stroessner is approached through 
diplomatic channels for such a purpose, he responds: "Shall I 
also expel the 1,500 Jews who have made a good life for them- 
selves in Paraguay, and who have contributed so much to our 
economic growth?" 

Despite the assistance Martin Bormann has received from 
various leaders in Latin America since his arrival, including help 
from members of U.S. embassies and consulates and several 
CIA station chiefs, Heinrich Mueller continues to exercise ex- 
treme caution in protecting Bormann. In 1955 and again in 
1957, following the transporting of the party minister to new 
locations, he leaked the story of Bormann's "death," repeating 
the old ploy of providing a body in a grave marked "Martin 
Bormann." Each time an exhumation took place it was found 
to be the remains of a deceased Indian, although one was that 
of a Jewish person, an Israeli agent who had gotten too close to 
his target. 

In 1957 Mueller established Bormann on a remote plantation 



213 



at the southernmost tip of Brazil, at a point that touches Para- 
guay, one mile inland from the west bank of the Parana River 
and 15 miles north of the Paraguayan border. It was a drab, 
depressing plantation area, but a natural fortress, stretching in a 
rectangle 40 miles along the Parana River, 100 miles inland 
from the sea. To the east it was protected by the river, which 
at that point is ten miles wide. To the south it had the im- 
penetrable jungle for protection; the all-but-impassable path- 
ways one would take to approach the plantation were guarded 
by Indians whose role was to alert the SS guards. The settle- 
ment was known as Kolonie Waldner, and SS men I have 
talked with who were with Bormann then spoke of the heat 
and the general lassitude there. Food and other supplies were 
brought by river boat, then trucked inland to the colony. Visitors 
came and went by Piper Cub, which upon landing would taxi 
up to a large hangar and disappear from view. A bowling alley 
down one side of the hangar provided about the only recreation, 
but the SS men I interviewed said that the best German cook- 
ing in the world was provided by former SS mess sergeants, and 
that this was an incomparable feature of the dining room. To 
quote one: "Still, it was small consolation for being stuck in 
such a place. We worked to construct proper housing, but it 
was hard to put out of one's mind the memories and thoughts 
of Germany and the good days of long ago." 

Martin Bormann continued to conduct his complex business 
affairs from Kolonie Waldner by remote control. A cadre of 
skilled professional business administrators would periodically 
return to this dismal, isolated area and make their reports on 
investments and on the prosperity and growth of the corpora- 
tions they controlled in so many different countries. Bormann 
appeared very much the plantation overseer, with boots, white 
pants and shirt, and a wide-brimmed panama hat. Such a hat, I 
am told, along with being protection from the ubiquitous hot 
sun, was also protection from poisonous spiders that dropped 
from trees. I asked one of my SS informants why they didn't 
use poison gas as the Americans had done in the Mato Grosso 
to defoliate the trees and exterminate the spiders. His bitter 
reply: "We used up all our poison gas during World War II." 

The plantation stay finally ended, and Bormann was moved 
again to the high mountains of Argentina that border Chile. 



214 



The hue and cry had died down. An occasional journalist would 
take up the hunt, but would be tracked by Mueller's men. At 
one point in time, NBC News in New York sent a news team 
to South America. But NBC News abandoned the principles of 
journalism when it made this a combined operation with Israeli 
secret agents and a Zionist organization in South America. It 
is probably still unaware that Mueller had penetrated the Zion- 
ist group, and that every step taken was known to him before- 
hand. It was quite impossible —and still is today —to surprise 
Mueller and therefore Bormann. They have a fail-safe system of 
protection that dates back to World War II when the espionage 
agents of Germany, Japan, and Italy were operating effectively 
throughout the Western Hemisphere; this is part of the infra- 
structure to which they became heir, which serves them today. 

The German fifth column in South America was far-reaching 
and effective, and when the war ended in Europe agents and 
station chiefs were instructed to stay in position and await fur- 
ther orders. They were to continue in their commercial careers 
as cover for the work they would be called on to perform: 
assistance to the 10,000 veterans of the SS who would need 
relocation help as they poured into Buenos Aires and fanned out 
to various nearby countries, and full cooperation with 
Reichsleiter and Party Minister Bormann and the other 50,000 
German VIP's of industry and research. All members of the 
NSDAP in South America were familiar with the Organization 
Book, which they had been receiving from Berlin for some years 
as leaders of local chapters of the (overseas) Auslands- 
Organization. A basic element in the book dealt with the rela- 
tionship of members to the Principles of Obedience: 

Through his incorportation in the NSDAP the brother or comrade 
(Parteigenosse) promises to maintain an unchangeable fidelity to 
Fuehrer Adolf Hitler and unconditional obedience to the leaders 
whom he shall designate. 

How extensive this Nazi apparatus was during the war years, 
and how it was able to guard and assist Martin Bormann after 
his arrival in South America in 1947, was spelled out by J. Edgar 
Hoover, head of the Federal Bureau of Investigation. 

In a 1943 report prepared by the U.S. Federal Bureau of 



215 



Investigation, whose wartime responsibility had been extended 
to spotting Axis agents and their activities in all Latin American 
countries by order of President Roosevelt, the FBI stated: 

After the rupture of diplomatic relations with the Axis by various 
countries of Latin America, the Axis began to use Argentina as the 
base of its espionage and sabotage activities against all American 
nations. It had been established that from this base of operations 
the Germans have spread the net of their subversive organizations to 
at least ten American countries, and that as a result of their work 
a large number of American lives, considerable American property, 
and the lives and property of the citizens and countries of the united 
nations which are engaged in the struggle against the totalitarian 
powers have been lost. 

Argentina was an ideal base for such espionage and sabotage 
tactics against other nations of the Western Hemisphere. The 
FBI also reported that "the following are the American repub- 
lics and territories directly affected by the activities of the 
German espionage ring, directed from Argentina: Brazil, Co- 
lombia, Cuba, Chile, Ecuador, the United States of America, 
Mexico, Paraguay, Venezuela, Aruba and Trinidad." 

The German espionage service in South America reported 
directly to the German High Command in Berlin, whence they 
received their instructions to send all possible information in 
the following main categories: ship arrivals and departures; 
movements of warships of the United States and England; im- 
ports and exports; U.S. armaments and industries; political data; 
weather reports; movements of American warplanes being fer- 
ried to Africa via Natal; operation of Pan American Airways; 
war effort of the United States; Panama Canal; defense meas- 
ures in the United States and Latin American countries; sabo- 
tage of English ships; and convoys of merchant vessels. 

The activities of German, Japanese, and Italian agents op- 
erating as separate cells in each country always revolved around 
an important clandestine radio station that transmitted their 
information in code to receiving stations in Hamburg, Germany. 
Japanese data was forwarded to their embassy in Berlin which 
then transmitted to Tokyo. Other information was sent by mail, 
with messages written in disappearing ink, or reduced to the 



216 



size of a microdot on a written page. Nazi Party members and 
German commercial companies also served as transmission 
agents of espionage reports to the German High Command. By 
having agents working in tight groups in each of the countries, 
usually unknown to each other, the Germans had the distinct 
advantage that when the individuals of one group were identi- 
fied by the FBI, or by the national secret police of a Latin 
American country, the other groups or cells were not generally 
affected, and were able to continue their operations without 
interruption. Brazil was at one time the center of Axis espion- 
age, but when restrictive measures were taken by the Brazilian 
government, Argentina became the predominant center. Easy 
access to funds is vital to successful espionage, and when Brazil 
began to take countermeasures against this fifth column, the 
local field man for the FBI in Rio de Janeiro reported to J. 
Edgar Hoover in Washington that on October 3, 1942, the sum 
of 638 million pesos had been sent by Axis agents from Brazil, 
Bolivia, Peru, Uruguay, and Paraguay for deposit in the Banco 
de la Provincia de Buenos Aires. 

Germany, of course, had a profound and quite critical inter- 
est in the rising war production of the United States. Nazi 
agents infiltrated all U.S. plants in which bombers and fighters 
were being produced and the information gathered by these 
employees was transmitted to Buenos Aires, where it was relayed 
to the mammoth wireless receiving station in Hamburg that 
pulled in messages from agents throughout the world. 

In Buenos Aires, an FBI field agent pinpointed the chief of 
the clandestine radio group in that major South American 
capital as "Friedrich von Schultz Hausmann, manager of the 
firm of Bromberg y Cia., at Bernardo Irigoyen 330." 

In 1941 the German espionage service had transferred von 
Schultz Hausmann from Chile, where he had been manager of 
the Lloyd Norte Aleman in Valparaiso, while serving as head of 
German agents there. When he moved to Buenos Aires to 
assume a more important position, he informed his Chilean 
intimates that they could reach him through post office box 
number 386, the one used by Bromberg y Cia. He cautioned 
that they must write in secret ink or by cable code to his new 
cable address "Alegre." Hausmann's close friend in Argentina 



217 



was Walter von Simons, head of the news agency Transocean, 
which Dr. Goebbels had used as a conduit to spread his propa- 
ganda to the newspapers of South America. 

The Nazi Party was effectively represented in all Latin Amer- 
ican nations. Mexico, as one example, had its German National 
Socialist Labor Party, which controlled the public as well as 
the private lives of all Germans living in Mexico. The party 
was illegal but active; it had divided the country into seven 
districts, each with its own local Gauleiter. While the NSDAP 
was outlawed in Mexico, it did have a legal front, the Deutsche 
Volksgemeinschaft, with the German ambassador, Baron Rudt 
von Collenberg, as honorary president. Thirteen German clubs 
of various types were committed to propaganda and espionage, 
but the overseeing element of all German activity was the 
Gestapo, under the direction of Georg Nicolaus, a dealer in 
machinery who took part in the attack on Poland and then 
was sent first to Colombia, next to Mexico City. The Japanese 
handled the military intelligence chores for the Gestapo in 
Mexico because German efforts were directed to the United 
States and to the more southerly countries of Latin America. 
To accommodate this additional work, Japanese tourists began 
arriving in great numbers in Mexico; some were assigned to 
other South American countries. In Tampico, Mexico, the prin- 
cipal meeting place for German, Japanese, and Italian spies was 
in the dental offices of Dr. I. Nishimura. 

A sustained effort was made by the Germans to win over local 
folk. In Ecuador, for instance, they had two main objectives: 
to control the commerce of the country, in association with 
their compatriots, the Japanese, and to displace "Yankee and 
English imperialism." Observers of the scene reported that they 
achieved both, thanks to years of superior, overbearing, haughty 
attitudes that characterized the Anglo-American companies in 
their relations with the native population. The Germans arrived 
as businessmen, explorers, scientific investigators, university pro- 
fessors, and journalists. The German pedagogic missions that 
came to Ecuador before Nazism, cleared the way for the Third 
Reich emissaries. A German school served as the meeting place 
of the Ecuadorian intellectuals on Saturday afternoons, attended 
by lawyers, writers, and professors. The school's director was 
Dr. Max Witt, an Ecuadorian-born son of German parents, and 



218 



a fervent Nazi. Dr. Witt was also a professor at the Mejia Na- 
tional School and a deputy in the National Congress. 

In Colombia, Hans Baumann, a Salesian priest, came to the 
attention of the FBI; J. Edgar Hoover passed on information 
regarding him to William J. Donovan, head of the OSS. 
Hoover reported that Baumann was carrying on activities in 
connection with an espionage ring that utilized the facilities of 
a clandestine radio station, PYL, in or near Santiago, Chile. 
Hoover attached a picture of Baumann and a photostatic copy 
of his party book indicating membership in the Auslands- 
Ausweis organization. "The information concerning Baumann 
has been secured from a confidential, reliable source," Hoover 
wrote to Donovan. 

Hans Baumann was born in Wiesent, Bavaria, on April 21, 
1897, and during World War I served in the army, a com- 
panion of the young Adolf Hitler in the trenches. He emigrated 
to Colombia in 1932 and became active in education, achieving 
the directorship of the Colegio Pedro Justo Berrio of Medellfn. 
During a return trip to Germany in 1937 he had lunch with 
Hitler and Martin Bormann; back in Colombia he engaged in 
NSDAP activities and espionage, and utilized the German firm 
of Fritz Fuhrop and Cia., a Nazi company that represented 
North German Lloyd, Hamburg- Amerika Lines, and the Nip- 
pon Yusen Kaisya Lines. The effectiveness of Baumann's work 
in Colombia was attested to by a further confidential field 
report to J. Edgar Hoover: "German Nazis have gained the 
friendship of many Colombians. It is understood that not only 
are these German individuals well liked by the Colombians but 
there is considerable sympathy for their cause. The wife of 
Schrader, manager of Steinwender Stoffregen Corporation in 
Pereira, said she hoped and prayed the Nazis would take over 
Colombia and that the United States would be 'sunk in the 
seas.' " The Axis population in Colombia at this time totaled 
5,844: 4,113 Germans, 1,572 Italians, and 159 Japanese. 

In their World War II drive to win the hearts and minds of 
Latin Americans, and to gain commercial ascendancy, these 
representatives of the Third Reich welcomed everyone to their 
ranks, and this included Jews. But the Jewish immigrants who 
had come to Colombia to start new lives could not be enlisted 
by either Germans or Americans. One FBI report stated, "Be- 



219 



cause of interest in their business they can't be won for the 
anti-Nazi fight." But there was the mysterious Jewish arms 
merchant, Luis Rochschild, who seemed to precede the advance 
of the German armies. He left Frankfurt for the Sudetenland 
and when German armies arrived went on to Prague, always 
wheeling and dealing. In Prague he transferred large sums of 
money through Switzerland to New York to Chile. In Santiago 
he made a business connection with the German import firm 
of Staudt and Company, Inc., and served this firm, which was 
on the Anglo-American blacklist, as "front man"; this enabled 
him to import textiles under his own name from New York 
and to sell the commodities to Staudt and Company. Front 
men were a common practice, enabling many German firms to 
continue doing business despite Anglo-American disfavor. From 
this group of front men, Bormann selected many who would 
serve as caretaker administrators of the new companies created 
for the flight capital program. In Buenos Aires, many members 
of the Jewish community owe their present prosperity to this 
predilection of the Bormann organization to use Jewish busi- 
nessmen as cloaks for commercial operations. 

Hoover sent along an FBI report to William J. Donovan: 

A Dr. Bernhard Mendel, an Austrian Jew and a naturalized Colom- 
bian and also a very wealthy businessman located at Bogota, has 
been engaged in activities apparently directed toward sabotaging 
the intelligence efforts of the united nations in Colombia. Accord- 
ing to the informant, Dr. Mendel is presently an agent for a German 
firm in Colombia and is the consignee of American-made products in 
that republic. While Dr. Mendel has on occasions professed to 
be an ardent anti-Nazi informant, his professed cooperation in 
combatting Nazi activities in Colombia has been of negative value. 
In view of the activities of Mendel, detrimental to the interest of 
the United States, the suggestion has been advanced that this 
individual be listed as an undesirable consignee and representative 
of American-made products in Colombia. 

The major German firms of South America were invariably 
centers for espionage activities. The Bayer Company, a subsidi- 
ary of I.G. Farben, whose principal business in Chile was the 
sale of chemical products, was placed on the American blacklist 
and prevented from doing business with the United States. 



220 



However, it prospered elsewhere and meanwhile in June 1942 
the FBI station chief in Chile reported to J. Edgar Hoover: 
"Werner Siering is the manager and head of the firm in Santi- 
ago. Numerous previous reports have been made concerning this 
individual, indicating that he is an active Nazi agent in South 
America. The principal directors of this firm are of German 
nationality and there are also 27 Germans employed in the 
office." The report went on to mention other German com- 
panies having active participation: Banco Germanico de la 
America del Sud, Compania Sud- Americana de Vapores, a 
steamship company, Siemans-Schuckert Limitada, Santiago Gas 
Company, and "Soquina, which is engaged in the production 
of gas from coal." 

Argentina by this time was under great pressure from the 
United States to break relations with the Axis. Instead, she 
proclaimed her neutrality in 1942. However, in January 1944, 
Argentina broke off relations with Germany and Japan over the 
flagrant espionage that had been taking place within her bor- 
ders. Still, this was not a commitment to war and the Peron- 
Farrell junta was shocked into action when the United States 
and most other countries recalled their ambassadors in the sum- 
mer of 1944. Then, three months before the German surrender, 
Argentina officially declared war on Germany and Japan on 
March 27, 1945, a symbolic gesture only, but it succeeded in 
normalizing relations with nations of the Allied world who 
returned their ambassadors, except for Russia. The German and 
Japanese diplomatic corps had to leave, however. But anticipat- 
ing such action as a possibility since 1942, Baron Guenther 
Freiherr von Thermann, a former German ambassador, held 
meetings on his farm, Isla Verde, in Cordoba province, where 
an organization was formed that would represent German inter- 
ests. The names of those constituting this group came into the 
hands of J. Edgar Hoover, and they show an interesting cross- 
section of commerce and banking. 

ARMY: Ricardo W. Staudt, former Austrian Consul, especially good 
relations with the Argentine army. Wilhelm Krankenhagen, 
party member from the firm Bromberg. 

NAVY: Rudolf Hepe, harbor superintendent of firm Delfino. Otto 
Rusche, the German firm of A.E.G. 



221 



HEAVY INDUSTRY: Dr. Arnold Stoop, board of directors of many 
German and Argentine firms and farms. Robert Mertig, Bay 
rische Motoren Werke, Dr. Carlos G. Linck, I.G. Farben, 
Wilhelm Schulenburg, firm of AFATUDOR. 

BANKS: P. Peterson, Banco Aleman Transatlantico, R. Leute, mana- 
ger, Banco Germanico. 

AIR AND GLIDERS: Walter Grotewald, Deutsche Lufthansa (Condor 
Line), Joachim Uffiembauemer, firm AFATUDOR, Labor 
Front. 

EX. AND IMPORTATIONS: Dr. C. Ernesto Niebuhr, syndicate of German 
firms, specialist in real estate business. 

SOCIETY: Theodor von Bernhard, very rich German farmer, Jewish 
girl friend in Montevideo, Uruguay, Hanni Eisler, an actress. 
Pays to Nazi party 30,000 pesos yearly. Ricardo W. Staudt, 
former Austrian Consul. Dr. Edlef E. Hosmann, insurance 
company of Hosmann & Cia. 

AGRICULTURE: Franz von Bernhard, brother of Theodor von Bern- 
hard. Erwin Pallavicini, German descent, in sugar business 
Hilleret. 

SCIENCE: Dr. Wolfgang E. Centner, of the INAG (Siemens electrical 
apparatus). Dr. Paul Mehlich, German hospital. Dr. Hanns 
Merzbacher, son of old German doctor, Merzbacher, German 
hospital. 

ARCHITECTURE: Dr. E. Zeyen, of the FINCA (constructors on 
credit). Dr. Engineer Walter Kossman, manager of the 
GEOPE, uncle of the former counsellor to the German Em- 
bassy. Henn, who is now in Berlin for the German Foreign 
Office. 

One of the most absorbing operations of the early forties was 
the clandestine German radio station located in Valparaiso, 
Chile. This station transmitted to Germany information from 
Axis agents operating in Chile, Argentina, Peru, Colombia, 
Ecuador, Guatemala, Mexico, and the United States. The man- 
ager of the German firm, Compania Transportes Maritimos, 
formerly a branch of the Norddeutscher Lloyd shipping con- 
cern, operated this illegal and powerful radio transmitter. He 
was Bruno Dittman, and he had succeeded Friedrich von 
Schultz Hausmann after he had been transferred to chief of 
station in Buenos Aires. Both the FBI and the U.S. Office of 
Strategic Services, under the direction of General William J. 
Donovan, were concerned about this transmitting facility. The 



222 



cipher experts of the OSS were able to intercept the messages, 
but it took time for them to break the code. Meanwhile, a 
continuous stream of important data from South America and 
the United States was being sent to Hamburg, and the precise 
location of the transmitter had yet to be determined. With the 
permission of the Chilean government, the U.S. Federal Com- 
munications Commission sent an electronics expert to Chile to 
determine the location of this station, which had become known 
as PYL. The communications expert made several tests and 
declared the broadcasts were being made from the house of 
Guillermo Zeller, at Avenida Alemana, 5508, Cerro Alegre, Val- 
paraiso. Zeller, who was the actual transmitter, was an expert 
radio technician and was using the most modern transmitting 
set devised, with antennas specially adapted for broadcast to 
Hamburg. Another PYL went on the air, and the FCC expert 
determined that it was located at Antofagasta. Then a third 
went into operation from Buenos Aires with equipment supplied 
by the Siemens manufacturing organization. This came under 
the management of Hausmann in the Argentinian capital; Haus- 
mann split his time between his duties at Bromberg y Cia. and 
the station. Operating such radio facilities and securing agents 
required a considerable amount of money to make everything 
mesh. Von Schultz Hausmann, in one message to Germany, 
instructed them to transmit funds to the account of O. Osterloh 
in the German Bank of Buenos Aires. Money was also paid to 
the Japanese diplomat Tadeo Kudo through this account to 
accommodate him for the work he was doing for the Germans. 

The transmitters located and their messages intercepted, the 
OSS was a step forward. But not until the code had been broken 
could a deep look into the Nazi espionage system be taken, 
serving as a lead to agents in the field. The late Elizabeth 
Friedman, wife of Colonel William Friedman, the master cryp- 
tographer who broke Japan's Purple Code, was a gifted cipher 
expert. She organized the OSS code and cipher operations for 
Donovan; to her goes the credit for breaking the German code 
used between the PYL stations in South America and Germany. 
Once opened up, the messages were found to be a series of 
businesslike instructions from a home office to agents. The latter 
sent their information and requested instructions on handling 
assorted undercover projects. Hamburg was always concerned 



223 



that all South American agents could prove legitimate employ- 
ment as cover for spy activities, which underlined the value of 
German commercial firms in all Latin American countries. One 
message follows: 

April 17, 1942 Hamburg to Valparaiso 

IT IS IMPORTANT THAT ESCO, TOM AND FLOR CAN PROVE BUSINESS AND 
SOURCE OF INCOME. 

After the sudden arrest of most German agents operating in 
Brazil, the intercepts indicated that Germany was very conscious 
of the safety of its men, as well as wishing to ensure continuous 
radio communications with its agents in Chile, the reason it 
opened up a second PYL, operated by "Pedro" in Antofagasta. 
This message indicates the concern: 

March 26, 1942 Hamburg to Valparaiso 

BE CAREFUL. ALFREDO ARRESTED. PLEASE ASK BACH WHICH OF YOUR 
COVER ADDRESSES HE GAVE TO ALFREDO AND WHOM ALFREDO PASSED IT 
ON TO. IN ANY EVENT, ABANDON YOUR COVER ADDRESS JUAN, AND DON'T 
PICK UP ANY MORE LETTERS THERE. 

The OSS straightaway learned that Bach was the cover name for 
Ludwig von Bohlen, air attache to the German Embassy in 
Santiago. Then a new agent, by the name of "Apfel," made his 
appearance on the intercepts. 

May 7, 1942 Valparaiso to Hamburg 

RECEIVED YOURS OF THE FIRST OF MAY. MONEY FOR A START IS AVAIL- 
ABLE. HOWEVER NOT FOR THE NORTHERN REPUBLICS OF SOUTH AMERICA 
GUARD TWO APFEL. 

This was of significance to the OSS, because Guard Two was 
the sabotage section of the German High Command, and Apfel 
was evidently in charge of sabotage along the west coast of 
South America. 

PYL also handled new mail instructions for letters of deliv- 
ery to Berlin: 

July 1, 1941 Hamburg to Valparaiso 

LETTERS FROM SHANGHAI TO SENORITA, PLEASE PUT INTO NEW ENVELOPE 



224 



AND SEND BY LATI TO DR. GANZ, BERLIN, CHARLOTTENBURG 4, LIEBEN- 
STRASSE 43. 

Identifying an agent in the field from these intercepts was 
important to the thrust and parry of this underground war. 
Once identified, a German agent could be neutralized. An inter- 
cepted message indicated that the Germans had in their employ 
an individual by the name of Clarcke, who was to be under the 
general supervision of Walter Giese, chief of the Nazi espionage 
service in Ecuador. The message stated: 

November 6, 1941 Rio de Janeiro to Berlin 

CLARCKE CAN BE UTILIZED BY GIESE IN COLOMBIA AND VENEZUELA. HIS 
POSSIBLE UTILIZATION IN U.S.A. NOT READY FOR DECISION. 

Then, unwittingly, this clandestine station in Brazil sent a mes- 
sage to Valparaiso for transmission to Hamburg: 

November 14, 1941 Valparaiso to Hamburg 

DAUGHTER OF CLARCKE SECRETARY IN U.S.A. EMBASSY QUITO SINCE 
NOVEMBER ONE. 

Clarcke was positively identified as Federico Clarcke Car, resid- 
ing at Huerfanos 2289, Santiago, Chile. Both father and daugh- 
ter were picked up. 

A profound interest in U.S. aircraft production by Germany 
was understandable, and Germany continued to ask the PYL 
stations in South America for an updating on production fig- 
ures. "To what extent has the construction of the assembly 
plants in Kansas and Tulsa progressed? When can the comple- 
tion of the first planes by this factory be expected?" 

That German agents in South America complied faithfully 
with these orders for information by the German High Com- 
mand is demonstrated by the typical message quoted here: 

January 1, 1942 Valparaiso to Hamburg 

PRODUCTION OF S03C BEGUN IN COLUMBUS OHIO FACTORY AT THE 
BEGINNING OF DECEMBER. EMPLOYEES OF ALL CURTISS AIRCRAFT FAC- 
TORIES IN DECEMBER TOTAL 27,000. PROPELLER PRODUCTION NOVEMBER, 
1,042. 



225 



While the information was pure gold to Germany, the usual 
fate befell many of these hard-to-get messages. All too often, 
responsible agencies of the German government ignored their 
implications. Albert Speer, minister of armaments and war pro- 
duction in the Third Reich, tells of one agonizing scene when 
he visited the Junkers aircraft plant in Dessau in 1941 to discuss 
production with General Manager Koppenberg. "After the 
meeting, Koppenberg led me into a locked room and showed 
me a graph comparing American bomber production as forecast 
accurately for the next several years with ours. I asked him what 
our leaders had to say about these depressing comparative fig- 
ures. 'That's just it, they won't believe it,' he said." 

With the war years far behind him, Martin Bormann goes on 
and on, quietly making history in worldwide financial circles. 
He was eighty on June 17, 1980, and his chief of security, Hein- 
rich Mueller, was seventy-nine the same year. Bormann today 
may be likened to the classic chairman of the board of a vast 
international business complex, of an organization holding 
greater assets than any private investment house on Wall Street. 
Bormann, aged though he is, continues to guide the destiny of 
his financial empire. But he is sufficiently prudent and fore- 
sighted to realize that the assets he controls must be placed in 
younger hands, and today the leadership council of the senior 
NSDAP group is reflected in a younger generation, comprising 
professional managers, lawyers, and financiers, who are calling 
the shots as money and trade are moved among the markets of 
the Americas and Europe. Their organization holds the bearer 
bonds that give him a voice in banks and industries of Germany, 
and likewise they hold blue chip stocks in U.S. heavy industries 
and chemical companies. They are represented too on the 
boards of corporations in France, Belgium, Holland, Sweden, 
Luxembourg, and Switzerland, as well as in a myriad of other 
countries, including those in their bastion, Latin America. Their 
management is of the best and the companies they operate 
return a profit to everyone involved, from the West German 
government in corporate taxes and increased trade, to the share- 
holders of all companies that participated so long ago in Reichs- 
leiter Bormann's flight capital program. 

Since the founding of Israel, the Federal Republic of Ger- 



226 



many had paid out 85.3 billion marks, by the end of 1977, to 
survivors of the Holocaust. East Germany ignores any such 
liability. From South America, where payment must be made 
with subtlety, the Bormann organization has made a substantial 
contribution. It has drawn many of the brightest Jewish busi- 
nessmen into a participatory role in the development of many 
of its corporations, and many of these Jews share their pros- 
perity most generously with Israel. If their proposals are sound, 
they are even provided with a specially dispensed venture capi- 
tal fund. I spoke with one Jewish businessmen in Hartford, 
Connecticut. He had arrived there quite unknown several years 
before our conversation, but with Bormann money as his lev- 
erage. Today he is more than a millionaire, a quiet leader in the 
community with a certain share of his profits earmarked as 
always for his venture capital benefactors. This has taken place 
in many other instances across America and demonstrates how 
Bormann's people operate in the contemporary commercial 
world, in contrast to the fanciful nonsense with which Nazis are 
described in so much "literature." So much emphasis is placed 
on select Jewish participation in Bormann companies that when 
Adolf Eichmann was seized and taken to Tel Aviv to stand 
trial, it produced a shock wave in the Jewish and German com- 
munities of Buenos Aires. Jewish leaders informed the Israeli 
authorities in no uncertain terms that this must never happen 
again because a repetition would permanently rupture relations 
with the Germans of Latin America, as well as with the Bor- 
mann organization, and cut off the flow of Jewish money to 
Israel. It never happened again, and the pursuit of Bormann 
quieted down at the request of these Jewish leaders. He is re- 
siding in an Argentinian safe haven, protected by the most effi- 
cient German infrastructure in history as well as by all those 
whose prosperity depends on his well-being. Personal invitation 
is the only way to reach him. 

A revealing insight into this international financial and in- 
dustrial network was given me by a member of the Bormann 
organization residing in West Germany. Meyer Lansky, he said, 
the financial advisor to the Las Vegas-Miami underworld, sent 
a message to Bormann through my West German SS contact. 
Lansky promised that if he received a piece of Bormann's action 
he would keep the Israeli agents off Bormann's back. "I have a 



227 



very good relation with the Israeli secret police" was his claim, 
although he was to be kicked out of Israel later when his pres- 
ence became too noted —and also at the urging of Bormann's 
security chief in South America. At the time, Lansky was in the 
penthouse suite of Jerusalem's King David Hotel, in which he 
owned stock He had fled to Israel to evade a U.S. federal war- 
rant for his arrest. He sent his message to Bormann through his 
bag man in Switzerland, John Pullman, also wanted in the 
United States on a federal warrant. Lansky told Pullman to 
make this offer "which he can't refuse." The offer was forwarded 
to Buenos Aires, where it was greeted with laugher. When the 
laughter died down, it was replaced with action. Meyer Lansky 
was evicted from Israel, and was told by Swiss authorities to stay 
out of their country, so he flew to South America. There he offered 
any president who would give him asylum a cool SI million in 
cash. He was turned down everywhere and had to continue his 
flight to Miami, where U.S. marshals, alerted, were waiting to 
take him into custody. 

The Bormann organization has the ultimate in clout and 
substance, and no one can tamper with it. I have been told: 
"You cannot push these people; if you do it can be extremely 
risky." Knowing their heritage, I take this statement at face 
value. 



228 



GERMANY KNEW WHAT WAS MEANT BY DEFEAT 
and occupation. The four zones ruled by the Allied powers were 
being shaped according to the governmental philosophies of 
their victors. The Russians dismantled factories in their zone 
and shipped everything moveable to the Motherland. For years 
the deadening hand of Soviet occupation lay like a fearsome 
doomsday mantle on the German zone it controlled. In the 
British, French, and American zones the order to dismantle 
was never given, because the French and British and the gov- 
ernments of the Low Countries who had been freed by Allied 
victory decided they could rebuild new plants more compatible 
to their economies of the postwar years. The main thrust of 
the Western Allies was to eliminate hard-core Nazi leadership 
and get the economy rolling once more. 

Russell A. Nixon, former acting director of the Division of 
Investigation of Cartels and External Assets in the U.S. military 
government in West Germany, spoke of the difficulties in those 
days investigating and doing something about the industrial 
and financial leaders of the conquered Third Reich. The de- 
nazification process was cumbersome and elusive, and captains 
of the economy below the level of those who had undergone 
the 13 Nuremberg war crimes trials were difficult to pinpoint 
as to extent of guilt and involvement, Nixon remarked, "because 
they, by chance, held certain high Nazi positions or because 



231 



they were in one way or another in a mandatory-arrest category. 
It was on a purely hit-or-miss basis; there was no policy with 
regard to industrial and financial leaders. When we finished 
interrogating a man, we were faced with the problem: What 
authority do we have to hold him? By what test do we decide 
whether he is in or out? We began to face some criticism 
because we were holding Germans in prison without 'specific 
charges.'" So, one after another, these men were released de- 
spite U.S. Joint Chiefs of Staff directive 1067, issued on May 
10, 1945, which stated that Nazis and Nazi sympathizers hold- 
ing important positions in industry, commerce, finance, and 
agriculture should be arrested and held for trial. 

The situation was the same when military government inves- 
tigators probed into the personnel of major banks. Bankers had 
arranged the financing of the war, and through their financial 
webs had established and maintained control over the econo- 
mies of occupied Europe for the Third Reich. The officers 
and board members of the Big Six banks were picked up, but 
efforts of the military administration to follow through were 
resisted by other Allied departments of the occupation. Russell 
Nixon recalled that when he moved to arrest the bankers he 
was unable to get the U.S. Counterintelligence Corps to assign 
him men to do it. "So we had to deputize our own staff people 
to go out and pick them up." But the departmental infighting 
didn't stop there. Nixon had trouble getting jail space, and so 
"the bankers merely remained under house arrest, in their own 
homes." On the part of some of the American generals, "This 
was some sort of screwball idea, anyway; another of Colonel 
Bernstein's schemes to tear up Germany." Finally, the key 
bankers did go to prison for a time, but only to be interrogated 
about their financial activities in the war, including: "What 
happened to the money and other liquid assets you sent out of 
Germany after August 10, 1944, when Martin Bormann 
inaugurated his flight capital program?" 

Not in question was such treasure as was discovered by the 
U.S. Third Army in a salt mine near Merkers in April 1945. A 
preliminary inventory of gold bullion, currency, and miscellane- 
ous property placed the value of the find at $515,825,802, and 
as Lieutenant General Walter Bedell Smith, chief of staff of the 
U.S. Army at SHAEF, stated: "The total figure arrived at was 



232 



made only from information on the Reichsbank tags attached to 
the sealed bags, boxes and parcels." In his letter dated 20 April 
1945, to the Combined Chiefs of Staff Committee, General 
Smith asked the Treasury Department to send expert weighers 
of gold bars with their equipment. The final inventory was 
carried out in the vaults of the Reichsbank at Frankfurt, where 
the treasure had been moved. General Smith also said it obvi- 
ously had belonged to the SS or the Gestapo. "Evidence indicates 
that part of the treasure represents loot taken from individuals 
who have been murdered, as it includes thousands of gold and 
silver dental crowns, bridges and plates and some personal arti- 
cles. It may, therefore, constitute items of evidence, and should 
be considered in that light. It is believed that agencies engaged 
in the determination of evidence for the prosecution of war 
criminals should be informed, and at the proper time should be 
permitted to inspect and investigate this part of the property." 

American and British treasury agents went to Frankfurt, per- 
formed their assessments, and the decision was ultimately made 
to put all the gold into an Allied "gold pot" for sharing as repa- 
rations, while the currencies (French francs, Belgian francs, 
Norwegian kroner, Czech kroner, Croatian kuna, Italian lira, 
Hungarian pengoes) were returned to the central banks of these 
countries. Parcels containing the sad reminders of concentration 
camp victims were held for agencies concerned with war crimes. 

But scant useful information was obtained from the leading 
bankers and industrialists held for interrogation. To be sure, all 
had approved and complied with Bormann's program of flight 
capital to neutral safe havens in 1944; they had faith that 
the Fatherland, or at least those zones supervised by Britain, 
France, and the United States, would rise from the ashes of 
defeat. They knew too that the money, patents, and new manu- 
facturing processes, along with scientists and administrators 
sequestered beyond reach of the Allies, would also be a 
necessary component in the resurgence of Germany. But they 
sidestepped acknowledging that billions had been sent from 
their country in the final nine months of the war, and that cor- 
porations outside the boundaries of Germany would be gen- 
erating further money in world markets during the years to 
come. Treasury officials in Washington, as in London, knew 
what was transpiring; the teams they sent into the field uncov- 



233 



ered enough evidence to prove a definite pattern. As for the 
news media, it did not seem important, although long-term it 
was really the biggest of the postwar stories. Yet so quietly was 
it handled by the Germans and so diffident was the reaction by 
the Allies, that few ripples rose to the surface, and investigators 
of the U.S. Treasury Department were taken off the case. 

Allied correspondents were then more interested in the prog- 
ress of the denazification program being carried out in the U.S. 
and British zones of occupation. The Allied administrators had 
removed 25,000 Nazis from banking and finance in the U.S. 
zone, but later found to their dismay that the individuals they 
were denazifying out of finance were going into related fields, a 
holding operation of sorts, until such time as they could move 
back into their old slots of influence and power — an identical 
process to that taking place in Japan. American and British 
newspapers played up the fact that 200,000 Nazis in the Ameri- 
can zone had been removed from industry and government by 
1946, which impressed readers in the United States and the 
United Kingdom, until later it came out that this had barely 
made a dent in the 2 1 /2 million Nazi Party members of the U.S. 
zone. Then, when Britain and America found themselves in- 
volved in a hapless cold war with former ally Russia, West Ger- 
man support was courted and welcomed, and the majority of 
those formerly declared Nazis quietly folded themselves back 
into industry, banking, and government. Forgotten was General 
George Marshall's clarion declaration of March 1945, when he 
listed 1,800 industrialists and bankers as "leaders who have 
thrived under National Socialism, welcomed it in the beginning, 
aided the Nazis to obtain power, supported them in office, 
shared in the spoils of expropriation and conquest, or otherwise 
benefited in their careers or fortunes under the Nazis." 

Realism superseded idealism when it was officially acknowl- 
edged by top occupation officers that permanent removal of 
such leadership from the West German scene would deal a 
devastating blow to German rehabilitation. Historically, men of 
talent and drive have a way of rising again to the surface follow- 
ing reverses, and this was the case in West Germany. Under 
the Marshall Plan, the money that was pumped into the econ- 
omy arrived at the right time, enabling plant management to 
rebuild the factories that would provide jobs and employment. 



234 



None of it went for luxury items, as in Britain, to compensate 
a people who had been deprived of many items in five years of 
war. The people labored mightily and practiced thrift. Private 
investment money began to flow back from the banks of 
Switzerland, as bankers there recommended such investments 
to their customers, as well as to their own bank investment com- 
mittees. Later, other money, which had found its way to the 
"neutrals" under the Bormann program, began to flow slowly 
from these safe havens to Germany, although the reverse flow 
didn't accelerate until the occupation ended and the destiny 
of the new Federal Republic of Germany was in German hands. 
Until that time the West German economy moved forward 
under the policy pronounced by Federal Chancellor Adenauer, 
the policy of a free economy: the greatest possible liberalization 
of the market. It had led to impressive increases in production 
and under Adenauer's successor, Ludwig Erhard, the free market 
economy was christened the "economic miracle." It was also 
made possible by a new labor supply, the influx of millions of 
refugees driven out of Eastern European countries by Soviet 
rule. There were 8 million expellees and 2 million refugees who 
arrived in industrialized West Germany between 1945 and 1961. 
They were integrated rapidly, making a real contribution to the 
growth of the Federal Republic by their desire to work hard 
and build a new life for themselves. 

Currency reforms to halt inflation, the free market economy, 
and the hard work of the populace changed the economic cli- 
mate of the new Federal Republic; money was worth something 
again and the supply of needed goods increased. Prices climbed, 
but they were slowly stabilized by an ever watchful government. 
By means of tax reductions and special privileges for investors, 
employers were encouraged to adopt policies of expansion. By 
mid-1951, 1936 levels of production were reached. West Ger- 
many was now turning out industrial products that were in great 
demand everywhere: machine equipment, electrical goods, autos, 
trucks, chemical products, steel, and electronic units. The indus- 
trial center of Germany expanded from the Ruhr to complexes 
in the Rhine/Main area and around the larger cities, like 
Stuttgart, Munich, Hanover, and Hamburg. 

A substantial infusion of money into this new Federal Repub- 
lic economy resulted from the Korean War in 1950. The United 



235 



States was not geared to supplying all its needs for armies in 
Korea, so the Pentagon placed huge orders in West Germany 
and in Japan; from that point on, both nations winged into an 
era of booming good times. 

Daimler-Benz A.G. of Stuttgart expanded its output of autos 
and trucks, experiencing no difficulty in switching from Wehr- 
macht staff cars and tanks to Mercedes-Benz cars for the luxury- 
inclined of the world, and diesel-powered small cars that 
dominated taxi fleets from Cairo to Cape Town. A newly insti- 
tuted bus line using Mercedes-Benz vehicles from Lagos to cen- 
tral Nigeria featured hi-fis and stewardesses bearing food, drink, 
and pillows; this prompted one delighted Nigerian to remark, 
"They certainly know how to make a customer feel wanted." 

Ferdinand Porsche, who had developed the Tiger tank, which 
was better than anything the Allies had during most of the 
war, put Volkswagenwerk back on its feet by redesigning his own 
Volkswagen as a postwar family car. He later set up his own 
company as a subsidiary of Volkswagenwerk and began produc- 
ing the sporty and fast Porsche. Willy Messerschmitt, who had 
turned out the best fighter plane of the war, became vice chair- 
man, a director and major shareholder of two peacetime Messer- 
schmitt aircraft companies in Augsburg and Munich, and twelve 
subsidiary firms in France, Holland, South America, and the 
United States. During the 1960s, when the new Luftwaffe was 
being trained at Luke Air Force Base in Arizona, the historian 
of this operation, retired U.S. Air Force Colonel Barney Old- 
field, now of Litton Industries, wrote that West Germany had 
paid $250 million for the U.S. jet fighters in which they trained, 
underwriting an annual payroll at Luke of $8 million. Willy 
Messerschmitt was invited to be guest speaker at one graduation; 
he flew his own jet to Luke Air Force Base from his own airfield 
in Augsburg. As he mounted the podium to speak, the 95 musi- 
cians of a German band struck up "Alte Kameraden" (Old 
Comrades). He died, esteemed, in Munich in 1978. 

As the big industrialists, who had been convicted at Nurem- 
berg for helping to create the German war machine, began 
emerging from prison in the 1950s, they too went back to work. 
Friedrich Flick, a farmer's son who became one of Hitler's 
biggest industrial supporters and had been a Reichsmark billion- 
aire during the Third Reich, emerged from prison determined 



236 



to pull together the shattered pieces of his coal and steel empire. 
As he left prison, reporters asked him, what he planned to do. 
"Make steel," was his reply. Oddly, the Allied decartelization 
policy of separating the giant industries contributed to his re- 
surgence. He was forced to sell his 60 percent holdings in one of 
the Ruhr's biggest coal combines. Unable to find a buyer in 
West Germany, he turned to his French associates of the pre- 
war and occupation years and sold his stock to the large De- 
Wendel steel concern in France, which paid him $26 million in 
cash and $19 million in blocked funds, which could only be 
reinvested in France or in other areas linked to the French 
economy. This forced him to invest the French funds outside 
of Germany, and he started buying industrial bargains abroad, 
from Belgium to Brazil. 

In 1955 Flick became the first German in the postwar period 
to buy openly into the French steel industry, purchasing a 25 per- 
cent controlling interest in Chatillon-Neuves-Maisons steelworks, 
one of France's Big Five steelmakers. The following year he engi- 
neered a deal that gave him a significant stake in Belgian 
industry, buying the largest single block of shares of the Hainaut- 
Sambre steel combine at a cost of $5.5 million. But one of his 
most important holdings was a 40 percent interest in Daimler- 
Benz A.G. Through a holding company, he also operated a 
complex of companies making steel, locomotives and industrial 
machinery, paper, chemicals, explosives, and synthetic fibers. He 
died in 1972 at the age of eighty-nine, again a billionaire and 
again one of the most powerful men in Germany. 

But as tycoons retired or died off change came to big industry. 
The clans like Krupp, Thyssen, and Henschel that had domi- 
nated West German commerce from their headquarters in 
Diisseldorf and the nearby Ruhr coal and steel basin, are no 
longer active business managers. The last Krupp heir, Arndt von 
Bohlen and Halbach, was dispensed with in 1967 with a $800,- 
000 pension to enjoy life as an international playboy. Heinrich 
Thyssen-Bornemisza runs his private Dutch-based investment 
group from Lugano, Switzerland, and his cousin, Count Fed- 
erico Zichy-Thyssen, grandson of old Fritz Thyssen, exercises 
control over Thyssen A.G. from his base in Buenos Aires. Krupp, 
Thyssen, and similar giant firms are today run by professional 
managers with boards of directors strong in representation on 



237 



the major banks. The Krupp Company, formerly Germany's 
most powerful industrial enterprise, now occupies tenth place 
on the list of West German corporations, but it is a healthy 
tenth, having reorganized in the early 1970s, eliminating such 
unprofitable operations as truck manufacturing, a hotel, and a 
department store in Essen. It is aggressive in Eastern Europe, 
Russia, and the Middle East. Krupp and the French concern of 
Les Forges de Strasbourg, a metal construction group, set up 
a jointly owned subsidiary to produce and market power dam, 
bridge, and steel structure equipment in the French-speaking 
African countries where the French firm has long-standing con- 
tacts. This merger emphasizes the close ties between the two 
companies before and during World War II. 

Krupp also has plans for expansion in the U.S. market, through 
its U.S. subsidiary, Krupp International, Inc., of Harrison, New 
York, a manufacturer of industrial equipment and systems. 
German-born Helmut L. Schwarz, who became a naturalized 
U.S. citizen in 1970, states: "We feel that this country will 
adopt an energy policy which will make more use of domestic 
resources — and we see a significant market in that area in which 
we have a lot to contribute." 

Inga Quandt, who as a widow is the surviving beneficiary and 
the inheritor of an industrial fortune but has little interest in 
or inclination toward business management, sold a 14 percent 
share in Daimler-Benz to the government of Kuwait for $400 
million. 

However, the Friedrich Flick Group of Diisseldorf does not 
represent absentee management. It is very much part of the 
global multinational scene; before he died Friedrich Flick, still 
referred to in Diisseldorf as "der alte Herr" (the old gentleman) 
took steps to insure continued active and family ownership 
after his death. He and his wife Marie, who died in 1963, had 
three sons: Otto-Ernst, born in 1916; Rudolf, born in 1919; and 
Friedrich Karl, born in 1927. The middle son was killed in action 
on the Russian front in World War II. The other two entered 
business: Otto-Ernst in 1953, Friedrich Karl in 1957. Around 
1960 there was a sharp break between father and eldest son, 
which became permanent when Otto-Ernst took his father to 
court to gain control of his inheritance. After several years of 
litigation, Otto-Ernst took a large cash settlement and severed 



238 



all connections with the company, living quietly in Diisseldorf 
until his death in 1974. 

Despite this family altercation, Friedrich Flick wanted to 
assure a role in the company for Otto-Ernst's three children, 
and especially for his two grandsons, Gert-Rudolf and Friedrich 
Christian. He arranged his bequests so that the two and their 
sister became owners of some 30 percent of the shares. He also 
specified that the two grandsons could become full partners 
upon reaching the age of twenty-eight. 

From the time of the contretemps with Otto-Ernst, it was 
apparent that Friedrich Karl Flick was heir apparent. He became 
a full partner in 1961, the third member of a business triumvi- 
rate that included his father and Konrad Kaletsch, his father's 
cousin. Flick, Senior, preparing for the succession, enlarged the 
number of partners to six in 1965, bringing in two men of 
Kaletsch's generation, plus his son's friends, Eberhard von 
Brauchitsch, Gunter Max Paefgen, and Harms Arnt Vogels. Von 
Brauchitsch is a Prussian aristocrat, nephew of the famous field 
marshal of World War II; Paefgen is a convivial, extroverted 
Rhinelander; Vogels, a sharp-minded and sharp-tongued Ber- 
liner. 

Remarking on the family ownership of the Friedrich Flick 
Industrial Holding Company, Friedrich Karl commented in 
Diisseldorf: "My shares will pass to my children, so the family 
character of the company will be preserved. As most of the 
shares are already held by family foundations, arrangements 
exist to assure continuity of management if anything should 
happen to me. But I intend to go on working as long as I can. 
When I am no longer able, then we will see what is to be 
done." There are no plans for any public sale of shares. "Un- 
doubtedly the general climate is becoming less favorable to 
family companies, but there is no reason for us to change things 
yet. We don't need the money." 

The Friedrich Flick Group enjoys about $3.2 billion in annual 
sales, largely realized from chemical, machinery, and paper ac- 
tivities. In 1978 it made a concerted drive to expand its invest- 
ments in various United States corporations. It was able to do 
this by selling 29 percent of the 40 percent ownership in 
Daimler-Benz to Deutsche Bank for $888 million, which the 
bank then floated off to preferred investors in West Germany and 



239 



South America. With this, added to another 200 million D- 
marks realized from the sale of some smaller properties, it 
bought for S400 million a 29.6 percent interest in W.R. Grace & 
Co., a chemical giant and diversified multinational that earned 
$222.6 million on sales of S5.27 billion in 1979. W.R. Grace & 
Co. is described as having "recession-restraint" characteristics, 
which appeals to the Germans. Flick, with its capital gains 
from these sales of properties in West Germany, was able to 
take advantage of the West German government's proffered 
capital gains bonanza that offered up to $500 million in tax 
benefits to industrial corporations that would invest up to $1 
billion in the United States by December 30, 1978, in projects 
deemed strengthening to the German economy or capable of 
fostering international trade. 

Flick likewise paid $100 million for a 34.5 percent interest in 
U.S. Filter Corporation, a high-technology company specializing 
in chemicals, pollution control equipment, and engineering ser- 
vices. The buy-in to U.S. Filter was suggested to Flick by a New 
York investment bank, Arnhold & S. Bleichroeder. An interest- 
ing footnote is that the S. Bleichroeder segment of the firm was 
founded in Germany in 1803, and later served as Bismarck's 
banker. By the 1930s there were no Bleichroeders remaining in 
the firm. Driven out of Germany by Hitler, it got together with 
another old German-Jewish bank, Gebriider Arnhold, founded 
in 1864, and set up offices in London and New York. 

But while Friedrich Karl Flick is today definitely the man 
topping the Flick pyramid in Diisseldorf, which city he insists 
will continue to be "my home and that of my company," the 
strength behind him and his administration of assets, assembled 
by his father the patriarch, is a strong professional management 
team that works in the background. Flick, Senior, had the same 
approach to family strength as did the elder Fritz Thyssen in 
the last years of his life, when he established a structure of 
immense managerial power that would aid his grandsons in 
Buenos Aires in producing perpetual profits for family members 
in Buenos Aires and Europe. In the shadows, of course, are the 
bearer-bond holders of both holding companies representing the 
Bormann organization, who are business realists and techni- 
cians of the first order. Before the restructuring of Friedrich 
Flick Industrial Holding Company of Diisseldorf and its subse- 



240 



quent investments in W.R. Grace & Co., and in U.S. Filter 
Corporation, it was felt by South American bearer-bond share- 
holders and Deutsche Bank that promising opportunities were 
being missed and that growth had flattened out. But today it's 
a resurgence for the Flick Group, and Friedrich Flick again 
presides over a balance sheet that is generally rock solid. 

Peter W. Grace, heir to the company he assumed control of 
in 1945 at age thirty-two when his father had a stroke, was de- 
lighted with the fiscal strengthening of the company that his 
grandfather founded. He has observed that he knew the late 
Friedrich Flick, who was sentenced to a term of seven years in 
prison, having been convicted of exploitation of slave labor 
during World War II. A spokesman for Grace said in Decem- 
ber 1978: "Peter Grace knew the late Flick well. . . . They were 
friendly, and he respected him very much." 

In these times it is of advantage to the Flick Group to buy 
extensively into W.R. Grace & Co. Not only is Grace America's 
fifty-first largest corporation, with annual sales of over $5 billion, 
but its corporate structure and output along the west coast of 
South America are strong. The founder, William R. Grace, was 
an extraordinary immigrant boy from Ireland who worked him- 
self into becoming a prosperous guano merchant, married the 
daughter of a United States ship captain, and thereby became 
an American citizen. By 1935 his company had extended over 
western South America, and was in control of 43 different com- 
panies, including sugar mills and five-eighths of the total cotton 
output of Peru. Old William R. capped his amazing career by 
twice being elected mayor of New York City, in the last cen- 
tury. Grandson Peter W., reared as he was in both Peru and 
New York, has always had an affinity for the family Flick as 
well as for the German community of Peru, small in number 
but dominant in the industrial and financial structures of this 
nation. Peru has long been a province of foreign capital, repre- 
sented chiefly by the International Petroleum Company, Cerro, 
Grace (of course), and various Swiss electrical interests. Al- 
though the army runs the country, it is a small pool of the edu- 
cated and advantaged class, criss crossed by family relationships, 
that dominates the economy. So it was altogether natural that 
Peter Grace and Friedrich Karl Flick should arrive at a business 
understanding in the domain of interlocking multinationals, 



241 



and that they should decide it was to their mutual interest to 
join forces. 

Thyssen A.G., West Germany's most important steel corpor- 
ation, employs 142,506 people, turns out 11.7 million tons of 
steel each year, and boasts annual sales amounting to 21 billion 
deutschmarks. Were Fritz Thyssen alive today, he would take 
pride in the fact that his shrewd maneuvers during and after 
World War II, to retrieve his steel and coal properties in Ger- 
many, as well as his out-of-the-country assets, had been a stun- 
ning success. 

In Buenos Aires on January 5, 1950, while visiting his daugh- 
ter Countess Zichy, he stated to the Associated Press that he had 
paid "a stiff price for his earlier friendship with the Nazis, for 
he had lost all his property and had been interned for four 
years in a concentration camp." He said that he intended to 
settle in Belgium, where he hoped to live out his days as a 
"stateless person." 

Residence in Belgium was never to be, for he died in Buenos 
Aires on February 8, 1951. Nazi authorities had seized his 
Vereinigte Stahlwerke A.G., now Thyssen A.G., Germany's 
largest steel and coal combine at that time, stripping him of his 
German nationality, subsequent to his flight to Switzerland on 
September 2, 1939, with his wife, daughter, son-in-law, and 
grandson. In a signed deposition in the Office of the Director 
of Intelligence, U.S. Group Control Council, on September 4, 
1945, he stated that he had been forced to leave Germany be- 
cause he had opposed the war and objected to the treatment of 
Catholics and Jews and to such Nazis as Goebbels, Himmler, 
Rosenberg, and Ley. He also felt that Goering had coveted his 
successful steel combine. 

Yet in a document from the U.S. Financial Intelligence 
Group, dated 30 April 1948, Berlin, it was concluded that among 
the German industrialists Fritz Thyssen was a main promoter 
of the National Socialist doctrine, both before and after Hitler's 
seizure of power. As chairman of Vereinigte Stahlwerke, he 
played a decisive role in the Fuehrer's rise through his generous 
contributions to the party, and by pressuring fellow industrialists 
to support Adolf Hitler. Fritz Thyssen started to be conspicu- 



242 



ous in German public life when he led the Ruhr coal and iron 
producers in their refusal to operate the mines during the French 
occupation of that area following World War I. Like Hitler and 
so many others, he despised the Treaty of Versailles as a "pact 
of shame," to be thrown aside if Germany were again to have 
pride. 

Thyssen's 'support of Hitler commenced just after the period 
of the Ruhr occupation. In 1923 he had contributed RM 
200,000 to the fledgling Nazi Party, through General Luden- 
dorff. Several years later Thyssen again came into contact with 
Hitler via their common opposition to the Young Plan of rep- 
arations. According to statements made by Thyssen to Allied 
investigators in 1945: "I do not know anyone among the indus- 
trialists who was supporting the party financially in 1928; I was 
then its principal supporter." 

In 1930 or 1931 he had arranged for a credit from the Dutch 
Bank voor Handel en Scheepvaart, Amsterdam, to accrue to the 
Nazis, amounting to RM 250,000 to 300,000 of which he repaid 
RM 200,000 to 280,000 out of his own pocket. In arranging this 
loan Thyssen dealt directly with Rudolf Hess. The money was 
spent for the so-called Brown House in Munich, which later 
became headquarters of the National Socialist Party. 

"The next sum I paid in favor of the Nazi Party," Thyssen 
continued, "was 150,000 marks, which I paid personally to 
Hermann Goering in 1932." After Hitler's rise to power, his 
steel combine contributed to the party a fixed sum for each ton 
of steel produced. In addition, Thyssen made substantial per- 
sonal contributions to the Nazis at regular intervals. 

After the financial crash of 1931, Thyssen openly embraced 
National Socialism. He joined the party in 1933; his member- 
ship number was 2917299. During the following two years he 
dedicated his resources and influence to aiding Hitler, organiz- 
ing meetings and raising funds from his industrialist friends. As 
a reward, he was showered with political and economic favors. 
He was one of five state counselors with a seat on the Economic 
Council whom Hitler appointed to that esteemed position for 
life. He was a National Socialist member of the Reichstag from 
1932 until the outbreak of the war, and a member of the Insti- 
tute for Social Order. He was also appointed by the Reich min- 



243 



ister of economics "Leader of the War Economy" in the iron- 
producing industry. As for his personal opinion of Adolf Hitler, 
on July 13, 1945, he stated: "After all, I don't think he did so 
many bad things. I don't think that in the beginning he only 
told lies; but the influence of the Party and his surroundings 
was very bad." 

In 1936 disagreements began to appear between him and 
Hitler over certain Nazi policies and practices. Thyssen did not 
resign any of his public offices, however, until 1939, when he 
departed Germany for Switzerland. From there he moved with 
his family to France in 1940, collaborating on a book titled 
/ Paid Hitler, which was to be published in New York City in 
1941. Later he denied having anything to do with the book, 
but his handwritten corrections on the manuscript, written and 
approved on the letterhead of the Hotel de Paris in Monte 
Carlo, addressed to Emery Reves, on April 27, 1940, justify the 
affidavit made in 1945 by Reves that publication was with 
Thyssen's knowledge and blessing. 

Most significant in Thyssen's deposition of 1945 was the 
following: "Before I left Germany, I kept my bank accounts 
with the Deutsche Bank in Diisseldorf and the same bank in 
Berlin, but the accounts were not large, for I had no confidence 
in German money. So much money was constantly being spent 
without being covered that I feared another inflation." 

Anticipating a weakening currency and inflation, Fritz Thys- 
sen had for years been inconspicuously shifting funds and other 
assets to other countries, and placing them in corporations and 
banks he controlled. He swore to Allied financial investigators: 
"I have no bank accounts in other countries, and no safe de- 
posits." 

In 1934 he had traveled to Argentina, and upon his return 
to the Third Reich reported to Hitler that the president of 
Argentina had proposed that Germany would get extra orders 
for its industry if Argentina could sell a considerable quantity of 
meat to Germany. Hitler was favorably inclined but the German 
farmers objected, fearing that this would lower the price of good 
German beef, so the overture was dropped. However, the central 
reason for this trip was Thyssen's acquiring of South American 
properties and investments. 



244 



Investigation by the American Embassy in Buenos Aires pro- 
duced the following report, of April 30, 1948: 

The holdings of Fritz Thyssen in Argentina may be of interest. The 
local firm, Thyssen-Lametal Compania Industrial y Mercentil Thys- 
sen Limitada, formerly importer and manufacturer of rolling mill 
equipment, rails and structural steel, has a paid-in capital of 
5,000,000 pesos, and along with its subsidiaries, namely, "Tungar" 
S.A., Crefin S.A., Creditos y Financiasciones, T.A.E.M., Speratti 
Romanelli and Carbonera Buenos Aires S A., is considered to have 
assets of approximately 20,000,000 pesos. This firm is controlled by 
Stahlunion of Diisseldorf, through the Dutch holding company 
Cehandro of Rotterdam. Information indicates that Cehandro is 
capitalized at 1,000,000 Reichsmarks, of which Thyssen is alleged to 
hold the controlling interest. 

Files of the local company seized by the junta (alien property 
custodian) at the time of intervention indicated that the actual 
shares were held in the name of Theo Urlich, a German of Rotter- 
dam. 

The only other property in Argentina in which Fritz Thyssen 
may be interested are two estancias (ranches), Don Roberto and 
Don Federico, the values of which are not known and which are 
alleged to belong to Calamine S.A., a Thyssen holding company. 

So we see that Fritz Thyssen had become a one-man, pioneer, 
flight capital entrepreneur before Martin Bormann instituted 
his massive thrust to move German assets beyond seizure of the 
Allied nations in 1944-45. And because he was the first to under- 
take such a movement without benefit of official certification 
from the Reichsbank and from the economic policy of leader- 
ship of the Third Reich, he was labeled a traitor for contraven- 
ing the currency policies of the Nazi state, which were voided 
by Reichsleiter Bormann in the national interest on the fateful 
date of August 10, 1944. 

An OSS confidential report distributed in London and Wash- 
ington disclosed not only that Thyssen had established a secret 
account in a Liechtenstein bank, but that he owned the bank 
itself. 

Thyssen controlled the family Pelzer Endowment Fund in 
Switzerland, originally established with substantial funds by his 
mother under her maiden name, Pelzer. The fund also had 



245 



assets in Holland and Belgium. The business generated by this 
fund and by other Thyssen holding companies was important 
financially to Bank voor Handel and Rotterdamsche Trustees' 
Kantoor, due to the great amounts of money that Thyssen was 
siphoning from companies on two continents into safe havens. 
In 1937 he moved 1 million Swiss francs to his daughter's ac- 
count in his Uebersee (overseas) Trust in Liechtenstein. He 
shifted 300 kilos of gold from the Pelzer fund to his safe deposit 
vault in a private bank in London, with the knowledge and 
approval of the Bank of England. He purchased stocks in the 
following Spanish, Dutch, and American corporations, accord- 
ing to an Allied investigative report of 1949 in Stuttgart and 
transmitted to headquarters of the investigative branch at Diissel- 
dorf. 

15,000 shares series E Compania Hispano-Americana de Electridad- 
Chade 

83,000 shares Kon. Nederl. Petroleum Maatschappij 
17,000 4% Atchison Topeka 1995 
10,000 4% Central Pacific 1949 

7,000 3% Kansas City Southern 1950 

7,000 4% Norfolk & Western 1996 
50,000 4% Southern Pacific 1955 

To understand the personal financial activities of Fritz Thys- 
sen, one must know the genesis of his fortune and the ramifica- 
tions of his family. The founder of the fortune was old August 
Thyssen, Senior, who died in 1926. He had been divorced in the 
1880s, his wife agreeing to accept an annual income. Her share 
of the family fortune was then transferred to the four children, 
August, Junior, Heinrich, Fritz, and Hedwig. 

August, Jr., died in the 1930s, with no interest in either the 
German or the foreign holdings of the family, other than his 
inherited income. Hedwig married a Baron Berg and took her 
inheritance in cash, likewise disdaining family business affairs. 
Fritz and brother Heinrich, who became Baron Heinrich 
Thyssen-Bornemisza, inherited the foreign and German partici- 
pations held by August, Senior. Hans and Julius Thyssen were 
nephews of the old man, minor figures in the Thyssen opera- 
tions. Neither was actively engaged in the business; Fritz ad- 
ministered their participations. 

Thus, the two principal figures of the Thyssen fortune 



246 



throughout the years preceding and during the Third Reich 
were Fritz and Heinrich. Neither liked the other, so they agreed 
to divide their inheritance into two separate spheres of interest, 
cooperating only when it was necessary. Fritz's circle of interest 
became the German holdings, Thyssen Gewerkschaft A.G., 
Thyssen Co. A.G., Pelzer Stiftung (the endowment fund), and 
Faminta A.G. Heinrich devoted himself largely to holdings 
outside of Germany, Bank voor Handel en Scheepvaart, Rotter- 
damsche Trustees' Kantoor, N.V. Handels-en-Transport Maat- 
schappij "Vulcan," Rotterdam, Press and Walzwerk A.G., 
August Thyssen Bank. 

Heinrich Thyssen became Baron Heinrich Thyssen-Borne- 
misza when he married into Hungarian nobility. In this way he 
had acquired Hungarian nationality, which gave him dual na- 
tionality. He also changed his residence to Switzerland when 
German pressures became too alarming, and in time acquired 
Swiss nationality. 

Despite the separation of interests and affection, Fritz always 
retained stock interests in Heinrich's banks and assorted com- 
panies. 

With such an international background in trade and finance, 
it was natural for Fritz Thyssen to view the tax and other re- 
strictions of the Third Reich as burdensome, to be circum- 
vented. According to an investigative study of his fiscal 
activities of the thirties by British financial experts, signed by 
H.R. Priestly in Diisseldorf on September 3, 1949, Thyssen's 
first step in a long dance of tax and currency frauds began when 
he disposed of his shares in the Dutch Hollandische-Ameri- 
kanische Investment Corporation. On his instructions Dutch 
accountants valued the sale at RM 1,250,492.12, and this was 
transferred to Germany. But the true value amounted to 21 
million Dutch guilders, and most of this remained in Holland 
to be credited to the family Pelzer Endowment Fund by the 
Bank voor Handel en Scheepvaart, N.V., Rotterdam, the bank 
founded in 1916 by August, Senior. 

It came later to the attention of a pair of German tax officials 
named Brill and Jansen that Fritz Thyssen and the two Thyssen 
nephews, Hans and Julius, owed RM 40 million to the German 
government in back taxes. Payment of these delinquent taxes 
was not pursued because by this time "the entire assets in Ger- 



247 



many of Fritz Thyssen had been declared confiscated by the 
Reich." 

The relinquished property consisted of relatively small bank 
accounts in Deutsche Bank, an estate in Bavaria near Straubing, 
an estate in Mechlenberg, the house in which he lived near 
Muelheim, and the crowning jewel of his assets, the steel com- 
bine. As Thyssen stated in 1945: 

"My chief property was my participation in the Thyssen com- 
pany in Muelheim. Formerly this company owned the works in 
Muelheim, but these went over to the Vereinigte Stahlwerke, 
and my company became merely a holding company, without 
works. Of this company I held 60 percent; the other forty per- 
cent belonged to my cousins Hans and Julius." 

Thyssen added: "My 60 percent was confiscated on behalf of 
the Prussian government. Under the law originally proclaimed 
after the burning of the Reichstag, and directed then against 
communists, my nationality was taken away by the German 
government and my property confiscated. Under the law, it 
should have gone to the German state, but Goering, as Prime 
Minister of Prussia, was eager for it-not only for the property, 
but for my little art collection, and I believe this was the reason 
it was confiscated by the Prussian state." 

Goering did not keep the securities; he had the art collection. 
Thyssen's securities were distributed to various individuals, but 
the majority shares were held by the Prussian state. However, 
the Thyssen holding company and the mills of Vereinigte 
Stahlwerke were blended into a vast combine, and the produc- 
tion of steel continued to roll under private management, al- 
though the government laid down the directives. 

The knowledge that government administrators now pos- 
sessed of Fritz Thyssen's foreign properties and his activities in 
camouflaging these assets came to the attention of Bormann, 
who had succeeded Rudolf Hess. It was October 1941, and 
Bormann had approved the policy of providing assistance to a 
few large industrial firms so that they might divert discovery of 
their overseas assets. The decision was a prelude to the all- 
encompassing Bormann program of 1944 to establish 750 new 
firms as safe havens for fleeing German capital. An example of 
how this camouflage action was initially planned and carried out 



248 



is revealed by documents found in the files of the Foreign 
Exchange Department at Diisseldorf by the Joint Special Finan- 
cial Detachment, U.S. Group Control Council, Control Com- 
mission for Germany (British Element), Diisseldorf, August 
31, 1945. 

In 1941, political developments in South America prompted the 
Vereinigte Stahlwerke to camouflage its Brazilian subsidiary com- 
pany, Stahlunion Rio. A deal was worked out between the Vereinigte 
Stahlwerke, the Reich Ministry of Domestic Economy, the Foreign 
Exchange Department of Diisseldorf, and the German Embassy in 
Rio, in order to protect the capital, a large accumulation of profits 
and reserves, and merchandise of the Stahlunion Rio amounting 
to more than 20 million Milreis. On 23.10.41 the Reich Ministry 
of Domestic Economy and on 25.10.41 the Foreign Exchange De- 
partment Diisseldorf approved and authorized the planned trans- 
actions. Stahlunion Rio was immediately instructed to carry out 
independently all camouflage transactions. Mail or cable could no 
longer be considered safe communication. 

The basic instructions to Stahlunion were as follows: 

1. Cash on hand was to be used for the purchase of securities of 
German companies and other European companies in countries 
under German influence. These securities were to be deposited in 
bank-safes in the name of reliable foreigners or burnt by the German 
embassy in Ro. In the latter case a list was to be kept and properly 
safeguarded. This would later permit a reissue of securities. 

2. All merchandise on hand was to be mortgaged and the proceeds 
were to be camouflaged as outlined in paragraph 1. Merchandise 
was also to be disposed of by sale at very low prices to reliable 
customers and agents who were to sell them for current prices and 
keep the profits in trust for Stahlunion Ltda. 

3. Part of the funds was to be used for investments in Brazilian 
firms or purchase of factories in order to retain and employ the 
workers and the sales staff. 

Sufficient quantities of the desired securities were not available 
on the Brazilian Stock Exchange. This fact caused a change in plans 
as follows: 

1. Brazilian securities, which were prevalent, were to be purchased 
and deposited in bank-safes. Stahlunion Rio was to keep the keys. 

2. If seizure or blocking of the safes appeared imminent, securities 
in the safes were to be removed and substituted by worthless objects. 

3. Before communications were broken off, the loan of limited 



249 



amounts to confidential persons was suggested as an additional 
camouflage measure. Siemens Electro Company Rio was mentioned 
in this connection. 

4. A certain Mr. H and his relatives were to be used as trustees for 
many camouflage transactions. His full name is never mentioned in 
the records. [However, it was later stated that "Mr. H. was Dr. 
Heida of Rotterdam, a Fritz Thyssen proxy and collaborator who 
played an important role in Thyssen's foreign transactions," accord- 
ing to a statement on September 3, 1949, by H.R. Priestly, a financial 
investigator in the Control Commission for German-British Element 
at Diisseldorf] 

Supporting documents for this report are in possession of the 
Devisenstelle Team, Diisseldorf. 

H.B. Resnik 

Although the above report refers to Brazil it is to be expected that 
similar instructions were given for the Argentine. 

Following these camouflage directives, Vereinigte Stahlwerke 
A.G. established these subsidiaries: 

1. Cia. de Mineracao de Ferro e Carvao, Rio 

2. Cia. Siderurgica Brasileira S.A., Rio 

3. Syndicate Mineire e Metallurgiee de Brasil, Ltda., Rio 

4. Soc. de Mineracao Catharinense, Blumenau 

Stahlunion Export A.G., Diisseldorf, the export arm of Ver- 
einigte Stahlwerke, A.G., paid Kurt von Dellinghausen, a Ger- 
man mining engineer employed by Vereinigte Stahlwerke to 
represent their interests in Brazil, and Dr. Salvatore Pinto, 
Junior; they had a hand in every subsidiary in Brazil. 

Pinto's chief interest, however, was the Companhia de 
Mineracao de Ferro e Carvao S.A., of which he was co-manager 
with Dellinghausen and nominally majority shareholder. Both 
served as proxies for Fritz Thyssen and were the conduits for 
vast sums of money to the Thyssen interests in Buenos Aires. 

Stahlunion Ltda., Vereinigte Stahlwerke A.G.'s chief subsidi- 
ary in Brazil, was vested by Brazilian authorities in 1942 before 
the Germans could transfer all shares to nominal Brazilian 
ownership. 

These lessons were observed by Reichsleiter Martin Bormann 
when he received confidential reports on the Brazilian camou- 



250 



flage operations from the German Ministry of Economics in 
Berlin. He determined that when he set up his safe haven flight 
capital program, he would not duplicate the mistakes of 1941 
made by the Ministry of Economics. 

In Lugano, Switzerland, meanwhile, Fritz Thyssen was ex- 
amining his options. There was no future for him in Germany 
while the war continued, although he had his clandestine ar- 
rangements. The German underground leaders had talked to 
him about participation, but although he sympathized he knew 
their cause would fail. The Nazis had the country by the throat, 
and would relinquish power only by defeat on the battlefield; 
such reverses would be a long time coming. In Lugano he had 
talked on several occasions with Hans Bernd Gisevius, who 
worked for Hjalmar Schacht, head of the Reichsbank. Gisevius 
was shortly to leave Schacht and become number one man to 
Admiral Canaris, head of the Abwehr and a silent force in the 
Schwarze Kapelle, the underground movement that aspired to 
capture Hitler or to assassinate him, and then to substitute a 
government that would sue for peace. Failing to enlist Thyssen, 
Gisevius became Allen Dulles's pipeline to Admiral Canaris, 
who had arrived in Berne in 1942 as chief of station for the 
OSS and President Roosevelt's personal representative for clan- 
destine operations in Switzerland and on the European conti- 
nent. Gisevius had a good run as a Dulles agent until uncovered 
by the Gestapo and obliged to flee to Berne in 1943. After six 
weeks in hiding, he crossed the Swiss border with false Gestapo 
credentials. 

Thyssen thought about England. His prewar connections gave 
him entry into the highest circles. This included Winston Chur- 
chill himself All of them knew they wouldn't last a week were 
Germany to overrun the tight little island, whether by war or by 
treaty, which is why Churchill underplayed the arrival of Rudolf 
Hess in 1941 as an emissary of peace. Thyssen had handsome 
bank deposits in London, including the 300 kilos of gold be- 
longing to the family Pelzer Endowment Fund. There was also 
his steel subsidiary in Wales, under the direction of Sir William 
First. Although his British funds were blocked, the knowledge 
that they were there was comforting. In his deposition of 1945 
to Allied investigators, Thyssen told of the visit paid to him in 
Lugano in March 1940 by Sir William First, who said the Bank 



251 



of England and the British government wanted him to sur- 
render the gold in exchange for an equivalent amount in pounds 
sterling credit. Thyssen agreed to the exchange, after obtaining 
permission from his eighty- five-year-old mother in Brussels, who 
had founded the endowment. 

Thyssen had good relations with top American government 
and industrial leaders too; in 1940, when he went to Paris, 
American Ambassador Drexel Biddle provided the Thyssens 
with U.S. passports for a proposed journey to Argentina via 
Spain. In Paris Mrs. Thyssen became ill and could not travel 
for a time. The Thyssens soon proceeded to Cannes. By May 
1940, the Germans had overrun France and they were turned 
over to the Gestapo. Goering explained to Thyssen later, "The 
French did not want to have you in France and gave you over 
to the Gestapo." 

In the light of this event, Fritz Thyssen was fortunate to have 
had a long-time relationship with Martin Bormann, beginning 
in 1923. 

French troops had moved into the Ruhr in that year to grab 
steel mills and coal mines as reparations, and to destroy the 
industrial capabilities of Germany. The move was contrary to 
the wishes of the United States and Britain, which did little 
more than wring their hands and file diplomatic objections. 
Fritz Thyssen had organized the Ruhr industrialists into a re- 
sistance force, which refused to make steel or dig coal for the 
French. 

Bormann, then the youthful district leader of the Mecklen- 
berg Freikorps Rossbach, a paramilitary organization established 
to disrupt French military movement in the Ruhr, had carried 
out a series of daring sabotage exercises by night, while working 
as an estate manager by day. Hardly more than a boy, he came 
to the attention of Fritz Thyssen. The two-tiered resistance — 
Freikorps and corporate — was financed by the industrialists. At 
a time of raging inflation throughout Germany, the Reichsmark 
had little value. But Thyssen and his peers in the Ruhr had 
printed scrip to finance the resistance through workers' wages. 
The relationship between Thyssen and Bormann was limited, 
but when Bormann was released from Leipzig prison after serv- 
ing a one-year sentence for political assassination of a traitor 



252 



friendly to France, both became imbued with the doctrines of 
Adolf Hitler. The Freikorps Rossbach, unlike Thyssen, believed 
in direct action in the field, not social ostracization. Hitler and 
the new National Socialist German Workers Party drove at 
combating communism and bringing financial stability to Ger- 
many. Martin Bormann joined the NSDAP at this juncture, 
but not until January 5, 1933, did Thyssen officially join the 
Nazi Party. The German resistance in the Ruhr succeeded. 

As Thyssen and Bormann made their ways into positions of 
power within the National Socialist Party, Allen W. Dulles 
observed from the wings. During World War I he had been an 
espionage agent serving the United States in Switzerland against 
the German and Austro-Hungarian empires. Between the wars, 
in the twenties and thirties, he socialized with the elite of Ger- 
man industry and banking, traveling on international corporate 
law business for the New York firm of Sullivan and Cromwell, 
which served German- American business accounts. He grew 
friendly with Fritz Thyssen, but knew Bormann only casually. 
The ruler-to-be of Germany's economy was climbing quietly, 
managing the finances of Adolf Hitler and the Nazi Party. Yet 
Dulles caught on that, as Hitler was voted into office, Bormann 
was the one to watch. It is axiomatic that you keep an eye on 
the number two man-the man who does the work. At a Berlin 
reception attended by Hitler, Thyssen, and Bormann, Dulles 
left Thyssen's side to seek out the diligent and inconspicuous 
Bormann, chatting with him about the future of Germany and 
Anglo-German-American rapprochement. Bormann ventured, 
according to a conversation I had with Dulles in 1969, "There 
is room for the three nations in the world today without war, 
but the Third Reich must not be checked in its drive for eco- 
nomic and diplomatic parity. I favor alliance with England and 
Poland and a particularly close relationship with America, as 
does the Fuehrer." Dulles remarked that Bormann was not the 
grubby, uncivilized man he had been led to expect. "He was 
soft-spoken and direct, but while he talked to you his eyes con- 
tinued to keep watch on Hitler and those surrounding him. I 
felt he was a man of strength who might one day best his more 
colorful rivals in the Nazi hierarchy." 

The Thyssens were transferred to Germany on December 2, 
1940, and passed two and a half years in a lunatic asylum near 



253 



Berlin, on the assumption that Thyssen was mad because he 
had voted against the war. Treatment in the asylum was good, 
with distinguished prisoners such as the Archduke of Austria 
paying for their maintenance. Hermann Goering arrived one 
day to interrogate Thyssen, probing about his assets and testing 
to see if the industrialist had changed his mind about the war. 
Goering learned nothing about Thyssen's foreign assets, and was 
told that he and Hitler were on the wrong course. Goering 
remarked that they would be invading Russia the following year. 

Gestapo examinations were intense and lasted for many weeks, 
always breaking off at the end of a regular work day. Thyssen 
said, "My life was never threatened by the Gestapo. I was not 
submitted to physical torture. One of my interrogators . . . 
offered his hand, but I refused it. He was quite angry, but did 
not hit me. 

"Another gentleman who questioned me, Abendroth, was 
very polite, probably because he thought I had helped another 
gentleman of the same name in Switzerland. The latter's wife 
was of Jewish origin." 

Fritz Thyssen's episodes with the Gestapo never took a nasty 
turn because Bormann had instructed SS General Mueller to 
handle Thyssen with care. Bormann was Thyssen's protector 
for old times' sake, and he admired the man who had given so 
much aid to the party when it sorely needed it. Also, Bormann 
felt Thyssen was his ace in the hole if he ever needed a personal 
pipeline to Allen W. Dulles. Dachau and Buchenwald both 
received Thyssen, but in both instances Bormann had the Thys- 
sens quartered in a house outside the main concentration camp 
areas. Then, when the Third Reich was reeling from the on- 
slaught of Allied forces, he had them moved south to the Tirol, 
where they would be set free by advancing American troops. It 
was the best Bormann could do; he could not free Thyssen, for 
he was outranked by Goering and Himmler, and Hitler would 
have been affronted at the release of the man who had disdained 
him in the late thirties. "Not only did he write insulting letters 
to me questioning my decisions but he openly consorted with 
Jews in Dusseldorf," Hitler had complained to Bormann. In 
1936, 1937, and 1938 Thyssen had the leading Jewish bankers 
of Dusseldorf join him each week for luncheon. It rankled the 
Fuehrer that the meetings were held in the same club where 



254 



he had been Thyssen's guest speaker in 1932, the occasion that 
had brought him the support of the Ruhr industrialists. As 
Thyssen told it: 

It is a very funny thing about Hitler's influence at such meetings. 
I don't actually remember but it is possible that at the close of the 
speech I cried out "Heil Hitler!" as I have been reported in the 
New York Times to have done; I think the "Heil Hitler!" salute 
was used at that time. It was a very successful speech; he persuaded 
them that he had a lot to offer Germany, that he had a good 
program for Germany. 

He declared that he favored: 

1. Restoration of the Hohenzollern in the form of a moderate king- 
dom like England; 

2. Alliance with England; 

3. Alliance with Poland. 

All this was very reasonable and I believed him. My faith in his 
words was strengthened by his promise to establish a social order 
according to the plan of Dr. Klein (of I.G. Farben) and myself, a 
plan which should realize the ideas of Pope Leo XIII as expressed 
in the famous encyclical "Rerum novarum." When Hitler had 
formed his new government everything seemed to be all right. He 
made an alliance with Poland, he concluded the fleet arrangement 
with England, he arranged the Concordat with the Pope, he made 
nonaggression pacts with different countries, and he declared that 
in the future he would live in peace with France. 

But after the burning of the Reichstag Hitler showed more and 
more of his real face. He began to act against the constitution by 
dissolving all parties with the exception of his own, he allowed 
Rosenberg's propaganda against the Catholic Church, he broke 
the Concordat, and the persecution of the Jews got more and 
more intense. 

In 1936 Thyssen concluded that his influence with Hitler had 
come to an end. He began to utilize his foreign subsidiaries as 
collection points for money that never even entered Germany, 
and within the Third Reich he stonewalled the tax collectors 
by keeping two sets of books. When the German army took 
over Holland, suspicious German tax officials searched for 
records of the Pelzer Endowment Fund in Rotterdam, but the 
records and files had been destroyed. Under examination by the 
Gestapo in 1940, Thyssen was vague in his recollections of for- 



255 



eign assets. The Gestapo held Thyssen for four and a half 
years. Following his release by American troops in the Tirol, 
he was equally vague when it came to pinpointing the locations 
and extent of his funds. Allied examinations stretched from 
1945 to 1949, a period when Thyssen was fighting for return 
of his German holdings, as well as those in Holland and Bel- 
gium. As late as September 3, 1949, a British government 
financial investigator complained: 

Thyssen continuously evades ... or else gives contradictory re - 
plies. ... he seemed to be perfectly in the picture on matters 
relating to the foundation of the Overseas Trust Company, and the 
transfer of assets from the Pelzer endowment into that company, 
being well aware of the fact that assets belonging to his daughter 
were in question. . . . He refused to give any further information 
under the flimsy pretext that these were matters which concerned 
his daughter. 

Fritz Thyssen knew by 1949 that he was just about home 
free. Being stripped of his German nationality by the Third 
Reich was a plus in the postwar years, when Allied occupation 
forces were trying to determine the true ownership of securities 
and other assets that had been seized by the Nazis. He put in 
claims for all he had owned in Germany, Holland, England, 
Belgium, Argentina, and the United States, using the fact of 
being a "stateless person" as sufficient reason for return of the 
confiscated property. In time, it all flowed back to him. 

With everything again in his hands, Fritz Thyssen departed 
Europe in January 1950. First, he paid a visit to Thyssen A.G., 
which had undergone a rebirth since the bombings of World 
War II, when it was 90 percent demolished. But under the 
management of Dr. Hans-Gunther Sohl, today chairman of the 
Advisory Board and chief executive of Thyssen A.G., the mills 
were again producing at capacity. En route to South America, 
Thyssen stopped off in London to check his British holdings 
and bank statements. He then proceeded to Buenos Aires. 

During the final year of his life, in Argentina, dividing his 
time between the villa in Buenos Aires and the ranches, one in 
Argentina, the other in Paraguay, Fritz Thyssen completed 
establishing the control that would assure everlasting family 



256 



prosperity through Thyssen A.G. Elder grandson Count Federico 
Zichy-Thyssen of Buenos Aires was placed on the board of 
this German steel trust. When the count votes at board meetings 
in Diisseldorf three or four times a year, he votes for the entire 
Thyssen family of South America and Europe. 

Count Federico Zichy-Thyssen, who has a younger brother 
Count Claudio Zichy-Thyssen, represents the largest single 
shareholding group, with 25 percent of the stock of Thyssen A.G. 
The remainder of the stock is diffused into Deutsche Bank in 
Frankfurt and Buenos Aires, which holds shares for many indi- 
viduals on both continents, including those representing the 
Bormann group. 

Countess Zichy resides permanently in West Germany. Her 
Hungarian husband had supervised the turning of thousands of 
ranchland acres into productive farm and cattle land, following 
their flight from Europe in 1940. These ranches in Argentina 
and Paraguay and the villa in Buenos Aires are occupied by her 
two sons and their families, who, it is said, "represent the old 
wealth of Buenos Aires." 

Fritz would have liked that. 

But if the heirs of the old German elite are moving away 
from industry, the opposite is the case with the hard-driving 
professionals who manage the destinies of the giant firms that 
continue to bring prestige and profit to the Federal Republic, 
who are the engineers of the German economic leadership. 

I.G. Farben, the Third Reich's most substantial foreign in- 
come producer, was back in business 60 days after the war in 
Europe ended. But in 1947 the U.S. Military Government an- 
nounced that I.G. would be dissolved into 47 smaller corpora- 
tions. Then American and British foreign policy took a different 
turn: the cold war was on and both Washington and London 
wanted to halt any Farben breakup. By 1950 emphasis was on 
a strong West Germany and industrial recovery, and it was 
finally decided that the I.G. plants should be reorganized into 
three companies: BASF (Badische Anilin and Soda-Fabrik), 
Bayer (Farbenfabriken vorm. Friedrich Bayer &Co.), and 
Hoechst (Farbwerke vorm. Meister Lucius and Bruening). Four 
smaller concerns under the Farben mantle — Agfa, Cassella, 
Kalle, and Huels — were also in contention. Under pressure from 



257 



Washington and London, and from the shareholders of the old 
Farben stockholders protective committee, who lobbied for their 
interests in Bonn, the Allied High Commission agreed to a plan 
of 159 I.G. plants' being formed into the Big Three (BASF, 
Bayer, and Hoechst). Agfa also went into the Bayer structure 
and Cassella and Huels went their way as independents. In 
October 1954, treaties were signed in Paris ending the occupa- 
tion of West Germany. In 1955, when the Federal Republic of 
Germany became a sovereign government, the shareholders of 
the new companies held their first annual meeting. Most were 
former I.G. stockholders, and one of the first motions passed 
was to change the Allied bylaws, mandating changing from 
open stock ownership back to the secrecy of bearer shares. There 
was relief in Switzerland and in South America, where financial 
secrecy is a way of life; it is quite necessary to the continuation 
of the Bormann organization. 

The Big Three are today the largest chemical companies in 
the world. Each is now larger than I.G. itself in its heyday, and 
the growth potential seems unlimited. The chairman of Bayer 
A.G. has set a goal of $1 billion in the U.S. market for Bayer 
A.G.'s subsidiary in America, Mobay Chemical Company. The 
Allied Liquidation Commission had separated the big banks 
from their branches. But when occupation ended the banks 
coalesced again and Deutsche Bank, Commerzbank, and 
Dresdner Bank continue their leadership. 

The German business blitzkrieg in the United States is due 
to the patient professionalism of German managers backed up 
by heavy spending on market research. William Watson, a U.S. 
acquisition man for German firms in America, observed, "In 
many cases there's a very seductive natural v fit' where a German 
buyer can marry a U.S. firm's selling skills and strong market 
base with its own financial strength and often superior tech- 
nology and wider product range." 

Mr. Watson described the circumstances of one such bargain- 
ing session. The German firm of Boehringer Mannheim wanted 
five U.S. firms that were marketing in its U.S. drug-product 
area, all controlled by Bio-Dynamics. At one point the six 
motels surrounding the Bio-Dynamics head office near Indian- 
apolis airport were each a headquarters for competitive teams 
angling for the prize, Bio-Dynamics. "Not only did the German 



258 



team camp on the spot for the three-week siege, it was led by 
the president of Boehringer, Kurt Englehorn." Recalls Watson: 
"I never saw a more tenacious group. They beat out the others 
with thoroughness and staying power." 

West German firms such as these are today generally model 
multinationals, having come a long way toward their goal of 
understanding people generally, and Americans in particular. 
Still, the new Farben image is best observed on the French- 
German border at Strasbourg. On any working day you can 
stand on the river frontier where a bridge straddles the Rhine — 
a traditional invasion route of three wars — and watch 10,000 
Alsatians streaming across the border from France to their jobs 
in the German chemical plant of Badische Aniline and Soda- 
Fabrick, the giant electrical firms of Siemens and Bosche, and 
Dow Chemical. The Alsatians say working conditions and pay 
are better than in France. 

According to Chancellor Helmut Schmidt, West Germany 
is to become increasingly an "exporter of patents, process, tech- 
nology, and blueprints." Companies like Volkswagen brought 
the Federal Republic through the sixties in good shape, but now 
nearly all German industrial authorities agree that the future 
belongs to manufacturers of sophisticated equipment like that 
turned out by such firms as Siemens. Siemens A.G. of Munich 
keeps 30,000 engineers and technicians busy at four research 
centers. The company registers 20,000 patents a year and mar- 
kets 100,000 individual products in almost every sector of elec- 
trical engineering, accounting for $16 billion in worldwide sales 
annually. It continues strong in South America, and has current 
contracts ranging from the $1.1 billion addition to Argentina's 
Atucha nuclear power complex to a $41.5 million telecom- 
munications installation in Paraguay for their good friend Presi- 
dent Stroessner. They expect sales in the United States to 
average $500 million annually, but, above all, the United States 
offers Siemens a hunting ground for the small electronics com- 
panies that it has been buying up, such as the Microwave Semi- 
conductor Corporation in New Jersey, or Aerotron, Inc., a North 
Carolina manufacturer of radio and telephone equipment. 

The Federal Republic has become Russia's biggest trading 
partner. In 1977 the two countries exchanged about $5 billion 
worth of goods, as U.S. -Soviet trade dropped 28 percent to 



259 



about $1.75 billion. The West Germans are currently building 
a gigantic multibillion-dollar steel plant and refining complex at 
Kursk, site of the greatest tank battle in history, waged by the 
Panzer divisions of the Wehrmacht and Soviet armored divi- 
sions in 1943. The Germans have also gained contracts from 
Russia by paying for the use of licensed patent processes owned 
by American firms. The firm of A.E.G.-Telefunken, by using 
licenses from General Electric, won a $732 million contract for 
gas turbine pumps for the "Friendship" gas pipeline from west- 
ern Siberia to the West German border in 1976. The 25-year 
trade pact signed by the Federal Republic of Germany and the 
Soviet Union in 1978 was hailed as a new breakthrough. But the 
Germans were not so sanguine. Otto Wolff von Amerongen, 
head of West Germany's industry and trade association, dis- 
counted the importance of the agreement: 

"It is not a historic accord. It gives German industrialists the 
chance to plan better and the possibility to accelerate ex- 
changes." 

He meant that each future industrial contract would be care- 
fully scrutinized by the Germans. If previous loans made to the 
Russians are not in the correct repayment stream, there will be 
no substitution of sheep and plum jelly for cash in return for 
German machinery and steel pipes. 

The intensity and drive of German businessmen has also 
produced a feeling of rejection among the young of West Ger- 
many, who can't quite figure out why so much energy is being 
expended on making money. This attitude in turn puzzles their 
parents, who feel the affluent young have been pampered and 
do not appreciate the monumental struggle of the past thirty 
or so years to build a thriving nation out of rubble. 

The older Germans also wonder why these young people, 
student activists and even terrorist sympathizers, should be dis- 
satisfied. Dr. Michael Haltzel, an American who has worked in 
West Berlin for several years, questioned whether a nation could 
in the long run sustain itself with a philosophy so prosaic as 
"enrich yourself." 

The Germans of the present decade are handling their rela- 
tions with the United States public and the Congress with the 
greatest of skill. Even BASF of Frankfurt has received American 
awards for imaginative work in improving relations between its 



260 



American plants and the neighboring communities. By the 1970s 
the West Germans had concluded that influencing U.S. public 
opinion is better accomplished with a skillful touch than with a 
meat cleaver, which had characterized their efforts during the 
two world wars. An example of such skill was the staged news 
event of June 5, 1972, when Willy Brandt announced at Harvard 
University that the Federal Republic of Germany would donate 
150 million marks ($47 million) to establish a foundation in 
honor of the Marshall Plan — a statesmanlike approach to the 
recovery of former enemies, and to the recovery generally of 
Western Europe. Brandt stated that the money would arrive in 
equal installments for the next fifteen years, for the establish- 
ment and operation in the United States of an independent 
American-run educational foundation specializing in solutions 
to European problems, to be known as the "German Marshall 
Fund of the United States — A Memorial to the Marshall Plan." 

The overriding function of this German George C. Marshall 
Research Foundation is public relations, to cosmeticize the 
German industrialists and bankers whose corporations had 
worked so successfully for the Third Reich. In October 1978 the 
Marshall Foundation was utilized as a platform for Dr. Hermann 
J. Abs, now honorary president of Deutsche Bank A.G., as he 
addressed a meeting of businessmen and bankers and members 
of the Foreign Policy Association in New York City on the 
"Problems and Prospects of American-German Economic Co- 
operation." This luncheon meeting was chaired by his old friend, 
John J. McCloy, Wall Street banker and lawyer, who had 
worked closely with Dr. Abs when McCloy served as U.S. High 
Commissioner for Germany during those postwar reconstruction 
years. At that time, Hermann Abs, as chief executive of Deutsche 
Bank, was also directing the spending of America's Marshall 
Plan money in West Germany as the chairman of the Recon- 
struction Loan Corporation of the Federal Republic of Ger- 
many. 

With them on the dais were Henry H. Fowler, Wall Street 
investment banker and former U.S. Secretary of the Treasury; 
Henry Cabot Lodge, former U.S. ambassador to the Federal 
Republic of Germany; George C. McGhee, another former 
American ambassador to West Germany, also a trustee of the 
Marshall Foundation and a member of various private and gov- 



261 



ernment advisory groups. These, along with the others on the 
dais and in the audience, represent firms and banks that are 
among the most prestigious in the United States and through- 
out the world; all benefited from the rebirth and rebounding 
prosperity of the new Federal Republic of Germany. Knowingly 
or not, these figures and their corporations are indebted to the 
man who was not there, the financial and administrative genius 
who set the foundation for the postwar recovery of West Ger- 
many, Martin Bormann. 

This stroking of American public opinion by German inter- 
ests, as by those of Japan, is calculated to open further the 
American market. The United States remains the richest and 
the most profitable market on the face of the earth, and these 
businessmen and bankers know that they either buy their way 
in or negotiate their way in. They know that if they are going 
to succeed as world companies they must have a generous slice 
of the U.S. market, and today this can be accomplished only 
through ties, treaties, and agreements, no longer entirely through 
retained earnings and bank lines of credit. 

A pair of living representatives of separate branches of the 
Thyssen family learned such facts of corporate life at an early 
age. Count Federico Zichy-Thyssen acquired his knowledge 
from grandfather Fritz Thyssen; his cousin Baron Hans Heinrich 
Thyssen-Bornemisza acquired similar corporate wisdom from 
his father, old Fritz's brother, Heinrich Thyssen. The latter 
became Baron Heinrich Thyssen-Bornemisza and took up resi- 
dence in Lugano, Switzerland, gaining Swiss citizenship. As 
Count Zichy represents the largest shareholder group in Thyssen 
A.G. from his home in Buenos Aires, the young baron directs 
his interest from his Villa Favorita in Lugano. 

One such holding in the United States is Indian Head, Inc., 
with American corporate headquarters at 1200 Avenue of the 
Americas, New York City. Thyssen Inc. has its U.S. offices 
farther down this avenue at number 1114, in the W.R. Grace & 
Co. building. Indian Head is a wide-ranging manufacturing 
conglomerate, with 42 plants in the United States and 10,400 
employees. It enjoys annual net sales of close to $604 million. 
For an industrial corporation of such size it has a remarkably 
low profile. It distributes no annual report — "We are a privately 
held corporation." Like Thyssen Inc., in the United States, it 



262 



has no background ownership file with the SEC because it has 
never had to go public. When Thyssen bought Budd Manufac- 
turing for S275 million, it was in cash, and therefore there was 
no requirement for corporate disclosures to the Securities and 
Exchange Commission. 

Still, good will is cherished, and German industrialists and 
bankers continue to strive to project a friendly German image 
in the United States. One noteworthy announcement, made 
from Washington, D.C., in March 1979 was that 57 priceless 
Old Master paintings from the collection of Baron Thyssen- 
Bornemisza would be taken on a tour of the United States in 
1979 and 1980. This collection of great masterworks is said to 
be — except for the Royal Collection of the queen of England — 
the greatest private art collection now in existence. This public 
traveling exhibit constituted a major achievement as a public 
relations ploy. Ever cautious, however, no German firm under- 
wrote the tour; Indian Head was kept out of the picture. In- 
stead, a major U.S. corporation was chosen to underwrite the 
masterworks tour. United Technologies of Hartford, Connecti- 
cut (152,000 employees, 200 plants, and a worldwide marketing 
operation in power, flight systems, industrial products and ser- 
vices), agreed to underwrite the cost of the venture as a favor 
to its German friend in Lugano, Switzerland. The project was 
initiated from Lugano; the baron, after consulting with his 
corporate image advisors, agreed to United Technologies rather 
than Indian Head with its hidden shareholders. The foundation 
that made all arrangements was another privately endowed, 
nonprofit organization, International Exhibition Foundation. It 
made the approach to United Technologies and also brought 
aboard the prestigious Andrew W. Mellon Foundation and the 
Federal Council on the Arts and Humanities. 

When the baron came to Washington for the official press 
preview of the tour he arrived, trim and bouncy, and at fifty- 
eight years of age, fit, fluent in French, Italian, English, and 
German. He expressed delight with American cooperation. A 
speaker at the Washington press ceremonies was Hubert Faure, 
president and chief executive of United Technologies Otis 
Group and a director of UT. He spoke warmly of his long-time 
friendship with Baron Hans Heinrich Thyssen-Bornemisza. 

It was a job well done. Old August Thyssen, Senior, who had 



263 



founded the family fortune, would have given good marks to his 
descendant for perspicacity in a country where good will and 
image mean so much. 

Following the two world wars, the Germans have always 
launched drives for the return of their "vested enemy assets." 
After World War I, German industrialists began an organized 
campaign. 

One example was Textile Mills Securities Corporation, an 
American holding company engaged in trading in securities as 
agent for foreign companies. The German group contracted 
with Textile Mills to "represent them in the United States with 
the object of presenting their cause to Congress," and to obtain 
legislation for the return of their assets from the Alien Property 
Custodian. The German assets in this situation involved $60 
million. The fee promised for the return of their properties was 
10 percent, or $6 million. The retainer contract was conditioned 
upon the ability of Textile Mills to get the legislation pushed 
through before the adjournment of the 70th Congress. 

The first step taken by Textile Mills was to employ the Ivy 
Lee public relations firm to generate propaganda involving "the 
sanctity of private property." The Ivy Lee firm went to work. 
Its expertise in remolding public opinion was unquestioned, 
and among its clients was John D. Rockefeller I. The firm pre- 
pared speeches favorable to the German cause for delivery by 
prominent American public figures, and flooded U.S. newspapers 
with comment and stories urging the return of seized German 
assets. It was a smooth campaign directed equally at the influen- 
tials of Washington and New York and at grass-roots America. 
Meanwhile, Textile Mills hired two Washington-smart lawyers, 
Warren F. Martin, former special assistant to the attorney gen- 
eral, and J. Reuben Clark, former solicitor in the State Depart- 
ment. These men advised on the preparation of two supportive 
brochures: Status of Enemy Property: Interpretations of Trea- 
ties and Constitutions; and American Policy Relative to Alien 
Enemy Property. Textile Mills employed F.W. Mondell, attor- 
ney and former representative in Congress, to make proposals 
to congressmen to promote speedy passage of the wanted legisla- 
tion; he appeared before congressional committees, flanked by 
Ivy Lee men and other specialists. This aggressive approach, 
along with wining and dining and bribery, eventually tripped 



264 



up Textile Mills. The outcome was a sordid tax case, which 
turned up in law books under the title, Commissioner of Inter- 
nal Revenue v. Textile Mills Securities Corporation, with the 
latter losing, its appeal denied by the U.S. Supreme Court. 

Another noted case was that of the German Corporation, 
Metallbank, seeking the return of $6.5 million held by the 
Alien Properly Custodian. This time the Germans went straight 
to the heart of a decision; they arranged an attempt to bribe 
the attorney general of the United States, Harry M. Daugherty, 
along with Thomas W. Miller, then Alien Properly Custodian. 
It worked, and in September of 1921 Custodian Miller took 
two checks drawn on the U.S. Treasury in the sum of $6,453,- 
979.97 to the Ritz-Carlton Hotel in New York City, returning 
these assets to the Germans of Metallbank. Later, a German 
representing Metallbank made delivery to an individual repre- 
senting the attorney general and the alien properly custodian 
of $391,000 in U.S. Liberty Bonds. Word got out, and brought 
about the criminal indictment in the U.S. District Court for 
the Southern District of New York, on May 7, 1926, of Daugh- 
erty and Miller. The custodian was sentenced to 18 months in 
Atlanta prison; the case against the attorney general ended in a 
hung jury. 

There were other cases, but those that succeeded for the Ger- 
mans were situations in which the German owners of companies 
in the United States changed the names or juggled the stock 
and started new companies with assets of the previous firms. 

Throughout the 1950s and 1960s, West German industrialists 
and bankers in the Third Reich conducted campaigns resem- 
bling those of the 1920s for the return of German assets. Some 
properties were sold off by the U.S. attorney general to the 
highest private bidder, among them General Aniline, an Inter- 
handel I.G. Farben holding company mentioned earlier, while 
others found their way back to full German ownership, in one 
fiscal fashion or another. In a few instances, American indi- 
viduals became touched with corruption that reached even into 
the U.S. Congress. A distinguished U.S. senator was investigated 
and rebuked for his impropriety of conduct by a Senate com- 
mittee of his peers, the beginning of the end for Senator Thomas 
T. Dodd. He had had a close and peculiar relationship with 
Julius Klein, who had been retained by German interests to 



265 



polish up their image in the United States. Julius Klein & Associ- 
ates, a Chicago-based public relations firm, was handsomely 
paid, for Ruhr industrialists calculated that having a Jew front- 
ing for them in the United States would be good business. 

During June and July of 1966 Klein occupied the attention 
of a Senate Committee on Ethics, which was looking into the 
foreign agent activities of Mr. Klein. He had been lobbyist, 
political public relations counsel, and foreign agent for the 
Society for German- American Cooperation, an umbrella for 
such firms as Mannesman A.G. of Diisseldorf, Rheinmetall of 
Diisseldorf, Flick A.G. of Diisseldorf, Daimler-Benz of Stuttgart, 
Der Spiegel magazine of West Germany, the State of Hesse in 
Frankfurt, and Bayer Aspirin and Pharmaceuticals. When Chair- 
man Fulbright opened hearings in the Senate on May 14, 1963, 
Julius Klein was hesitant in identifying his German principals: 

The CHAIRMAN: On April 6, 1960, you filed the first registration 
for a committee representing German industrialists and civic leaders, 
is that correct? 

Julius Klein: Yes, Mr. Chairman. The committee doesn't like to 
have their name in newspapers or registered and so on and so forth, 
therefore, they call it a group. Every time when I came to Germany, 
three or four times a year, they had a group together, about 150 or 
200, that I addressed. They agreed that they would permit me to 
file the name of the board, which I did. But the Frankfurter Bank 
was the principal, Mr. Chairman. 

The CHAIRMAN: Was the bank employing you or was the bank 
merely the conduit for payment? 

JULIUS Klein: No, the bank was the agent for this group, Mr. 
Chairman. As a matter of fact, the head of the bank was the chair- 
man of the group, and he was the toastmaster at every dinner that 
I appeared at, at Frankfurt. 

The CHAIRMAN: It doesn't help me yet as to who your principal 
is. Will you please try to clarify in my mind and the committee 
record as to whom you represent? 

JULIUS KLEIN: Well, Mr. Chairman, I represent a society in Ger- 
many for the purpose of promoting good relations between the 
United States and Germany. These are my principles and to the best 
of my knowledge I translated into English the name of that society 
(Foerderkreis fur Deutsch-Amerikanische Zusammenarbeit, the So- 
ciety for the Promotion of German-American Cooperation). That 
society does not alone promote the good will between Germany and 



266 



the United States but with all Latin American countries, so I am 
only a little part of the activities for their group. 

The CHAIRMAN: The law is quite clear that you should identify 
your principals. You don't question that, do you? Now to state that 
you represent a good will society or friendship society without 
stating any of the people — . 

Julius Klein: I have the list here. 

The CHAIRMAN: State who the members of the society were. 
JULIUS KLEIN: The General Secretary is a distinguished counsel — . 
The CHAIRMAN: Were these the officers in 1960 when you filed? 
Do they control the society? 
Julius Klein: Yes, sir. 

The CHAIRMAN: Who are they? Put their names on record. 

JULIUS KLEIN: Dr. Gerhard Hempel, former mayor of Weimar, 
now the General Secretary of the group — . 

The CHAIRMAN: Is he the man with whom you negotiated the 
contract? 

Julius Klein: Yes, sir. 

The CHAIRMAN: Did you file his name when you negotiated, 
when you filed in 1960? 

JULIUS Klein: No, in 1960 I negotiated with Dr. Janssen, the 
president of the Frankfurter Bank, and that is the way I registered. 

The CHAIRMAN: Why didn't you file the names so we could 
identify your principals? This is a major point I would like to make. 
I just wondered why you didn't do this? You identified Mr. Hempel. 
Was there anyone else? 

Julius Klein: Yes, sir. 

The Chairman: Who are they? 

JULIUS Klein: Dr. Walter Leiske, former mayor of Frankfurt. 
The Chairman: What is he now? 

JULIUS KLEIN: He is a distinguished consultant on economics, he 
is an economist. 

The Chairman: Consultant to whom? 
JULIUS KLEIN: To industries in Germany. 
The Chairman: Who else? 

JULIUS KLEIN: Mr. Udo Boeszoermany, banker from Stuttgart, 
and Dr. Paul Schroeder, another banker from Stuttgart. They con- 
stitute the executive committee for the board of directors. 

The CHAIRMAN: How do they procure their funds? 

JULIUS Klein: Well, Mr. Chairman, that should be addressed to 
the group. All I am interested in is to get paid. Where they get the 
money from and how is their business. 

The CHAIRMAN: You are not interested in who pays you? 



267 



JULIUS KLEIN: I don't care where the money comes from, as long 
as it doesn't come from Nazis or Communists. 

The CHAIRMAN: If you don't know, how do you know it does not 
come from Communists or Nazis? Can you give the committee any 
ideas on what basis they paid you? Do they pay you any specific 
amount or must you accept whatever they choose to send you? 

JULIUS KLEIN: Oh, no, Mr. Chairman. I have an arrangement 
which was originally made with the Frankfurter Bank when they 
were acting for this group, that I would get between $125,000 and 
$150,000 a year. 

The CHAIRMAN: It is this committee's business as to who your 
client is, and I am not satisfied that you have disclosed your 
principal. 

The interrogation of Julius Klein before the Senate com- 
mittee continued, still without full disclosure of the key prin- 
cipals of his society client; although it developed that Dr. Paul 
Krebs, a director of Deutsche Bank, had also paid Klein between 
$75,000 and $100,000 a year— "I've forgotten the amount, Mr. 
Chairman" — on behalf of the Society for the Protection of For- 
eign Investments. Early on, long before his appearance before 
the Fulbright committee, Klein had been effective, and word 
was passed to other German firms that Daimler-Benz A.G. had 
signed a contract with Klein under the terms of which he was 
"to supply Daimler-Benz with situation reports on political, 
economic, technical, personnel, or general and other conditions 
that might be of interest to the business development of D-B 
A.G. in the United States of America." 

Another area of German foreign agent activity was revealed 
when Klein testified that prior to his German society, govern- 
ment, and industrial accounts, he had represented for one year 
the Republic of Panama for $40,000; this was followed by a 
contract with an organization that Klein described as being 
"formed by Lord Shawcross of England and Mr. Hermann Abs 
of Germany to bring about a Magna Carta for the protection of 
foreign investments of World War II." Lord Shawcross, a 
distinguished barrister and financier in the City of London and 
a board member of many international firms, had also been 
chief prosecutor for the United Kingdom before the Interna- 
tional Military Tribunal at Nuremberg. Here he also renewed 
his prewar, wartime, and postwar relations with Hermann Josef 



268 



Abs, then and now doyen chief of Deutsche Bank and a direc- 
tor of Daimler-Benz and Siemens. 

The full scope of Julius Klein's political lobbying on behalf 
of his foreign clients did not surface until two other Senate 
committees held hearings. One was the Subcommittee of the 
Committee on the judiciary of the U.S. Senate in the 85th 
Congress, and the other consisted of hearings before the Select 
Committee on Standards and Conduct of the U.S. Senate, in 
1966, relating to Senator Thomas J. Dodd and his relationship 
with Julius Klein. 

At the select committee hearings, Senator George Smathers 
of Florida made this statement: "It is my understanding that 
Dr. Hermann J. Abs, former director of I.G. Farben and a 
prominent financial figure during the Hitler regime, is the com- 
mon denominator of this group seeking return of vested enemy 
properties of World War II." 

Senator Smathers also pointed out that the foreign agents' 
registration statement for this project was signed by "the Wash- 
ington law firm of Ginsburg, Leventhal, & Brown, the Washing- 
ton law firm of Boykin &De Francis, and the public relations 
firm of Julius Klein & Associates." Those who signed for "The 
Society for the Promotion of the Protection of Foreign Invest- 
ments" were Dr. Paul Krebs, a Deutsche Bank director, and 
Hermann J. Abs, president of the board of directors of the 
society. 

These hearings were being widely reported in German news- 
papers and on television and radio, and Julius Klein suffered a 
falling away of his German clients discomforted by the unwel- 
come publicity. He turned to his friends in the Senate for help; 
his friends included Senator Dodd, the late Senators Hubert 
Humphrey and Everett Dirksen, Senator Jacob Javits, the late 
Senator Kenneth Keating, and Senator Mundt. Klein virtually 
demanded of Senator Dodd that he make a special trip to Bonn 
and speak with Chancellor Adenauer and others to persuade 
them that he, Klein, was highly regarded by senators on both 
sides of the aisle, and that his Germans should not fear to con- 
tinue doing business with him. 

So Senator Dodd traveled to Germany on behalf of Julius 
Klein; who had contributed so much money to his campaigns 
and to his personal life style. His meeting in Bonn with Chan- 



269 



cellor Adenauer was arranged by Dr. Ludger Westrick, state 
secretary in the Office of the Federal Chancellor, likewise a 
director of the Society for German-American Cooperation. On 
his return to Washington Senator Dodd sent a fulsome letter 
of praise, written by Klein, to Ludger Westrick, who had been 
promoted to minister. One phrase therein, "I know of your 
splendid record," was not without unintended irony. For West- 
rick had another type of record, which had been concealed but 
which was known to the OSS. He was a classified "Wehrwirts- 
chaftsfuehrer," a leader associated with notorious Nazi enter- 
prises, and he had also been a district economic advisor to 
Reichsleiter Martin Bormann. 

The Senate committee found Senator Dodd's relationship 
with Julius Klein indiscreet, one that went beyond the proper 
role of a United States senator. But because of an inability to 
identify and question Klein's German clients, they declined to 
pass a formal motion of censure on Dodd's relationship with 
him. However, as the Klein association was only one of many 
indiscretions of Senator Dodd that the committee had under 
investigation, this Senate committee on ethics later censored 
Dodd for diverting to his use more than $100,000 in campaign 
funds. 

The importance of the Klein affair, hardly earth-shaking in 
retrospect, is the clear picture it presented to the American 
public as to how press agents and lobbyists for foreign interests 
work themselves into the mainstream of United States political 
power and contort legislative processes to the gain of their 
clients. Today there are 647 registered and active Americans so 
occupied, and this figure does not include the many thousands 
of foreign nationals residing in the United States and spending 
all their time promoting their own national interests; Koreagate 
is but one example. 

While not really illegal, it was Julius Klein's boldness of 
manner in suborning an elected member of the United States 
Senate to his own ends that projected him onto the front pages 
and frightened off his West German clients, who preferred, as 
always, to hide their movements, and to act with circumspec- 
tion and secrecy. One of the first to leave the Klein client list- 
ing was Friedrich Flick of Diisseldorf, the tycoon who had also 



270 



been an ardent contributor to Himmler's Third Reich club 
known as "Friends of the Reichsfuehrer-SS." The characteristic 
secrecy surrounding the actions of German industrialists and 
bankers during the final nine months of the war, when Bor- 
mann's flight capital program held their complete attention, 
was also carried over into the postwar years when they began 
pulling back the skeins of economic wealth and power that 
stretched out to neutral nations of the world and to formerly 
occupied lands. 

There was a suggestion of this in France. Flora Lewis, writing 
from Paris in the New York Times of August 28, 1972, told of 
her conversation with a French publisher: 

"It would not be possible to trace ownership of corporations and 
the power structure as in the United States. 'They' would not 
permit it. 'They' would find a way to hound and torture anyone 
who tried," commented the publisher. 

"They" seem to be a fairly small group of people who know 
each other, but many are not at all known to the public. "They" 
move in and out of government jobs, but public service apparently 
serves to win private promotion rather than the other way around. 

The Government "control" that practically everyone mentions 
cannot be traced through stock holdings, regulatory agencies, public 
decisions. It seems to function through a maze of personal contacts 
and tacit understandings. 

The understandings arrived at in the power structure of France 
reach back to prewar days, were continued during the occupa- 
tion, and have carried over to the present time. Lewis, in her 
report from Paris, commented further: "This hidden control of 
government and corporations has produced a general unease in 
Paris." 

Along with the unease, the fact that France has lingering and 
serious social and political ailments is a residue of World War 
II and of an economic occupation that was never really termi- 
nated with the withdrawal of German troops beyond the Rhine. 
It was this special economic relationship between German and 
French industrialists that made it possible for Friedrich Flick 
to arrange with the De-Wendel steel firm in France for purchase 
of his shares in his Ruhr coal combine for $45 million, which 



271 



was to start him once more on the road back to wealth and 
power, after years in prison following his conviction at Nurem- 
berg. 

West Germany's economic power structure is fueled by a 
two-tier system: the corporations and individuals who publicly 
represent the products that are common household names 
around the world, and the secretive groups operating in the 
background as holding companies and who pull the threads of 
power in overseas corporations established during the Bormann 
tenure in the Third Reich. As explained to me, "These threads 
are like the strands of a spider's web and no one knows where 
they lead-except the inner circle of the Bormann organization 
in South America." 

That there is a Bormann organization is unquestionably true. 
I know from personal experience. During years of research for 
this book, I have become aware of Heinrich Mueller and his 
security force, which provides protection for the leadership in 
Latin America and wherever else they may travel to Europe and 
to the United States to check on investments and profits. 
Through intermediaries, I have attempted unceasingly to pene- 
trate to the central core of the organization in South America, 
but have been denied access. At the last meeting that I know 
about, it was voted: "Herr Manning's writing would focus un- 
due attention on our activities and his request must once again 
be denied." The elderly leaders, including Reichsminister Bor- 
mann, who is now eighty, wanted me on the scene to write of 
their side of the story, above all his story, of one of the most 
amazing and successful financial and industrial cloaking actions 
in history, of which he is justifiably proud. 

I had sent word to Bormann that the true story, his firsthand 
account, should become a matter of historical record, and 
stated that I would be agreeable to writing it if I could tell his 
true story, warts and all. Back came the word: "You are a free 
world journalist, and can write as you think best. We, too, are 
interested only in truth." They agreed to my request to bring 
along a three-man camera crew from CBS News to film my con- 
versations with Martin Bormann, and even approved my wish 
for at least a personal thumbprint of the former Reichsleiter 
and party minister, which would be positive proof of his identity. 
At the organization's request, I sent the background, names, 



272 



photos, and credentials of the particular CBS cameramen: 
Lawrence Walter Pierce, Richard Henry Perez, and Oden Lester 
Kitzmiller, an award-winning camera crew (which got the ex- 
clusive film coverage of the attempted assassination of Governor 
George Wallace when he was running for president). 

I am sorry to say that the younger leaders, the ones now in 
virtual command, voted "No." They did agree, however, that 
232 historical documents from World War II, which Bormann 
had had shipped out of Berlin in the waning days of the war, 
and which are stored in his archives in South America, could be 
sent to me anonymously, to be published. They said their 
lengthy investigation of me had produced confidence that I was 
an objective journalist, as well as a brave one, for their probing 
stretched back to World War II days, and up to the present. 

Heinrich Mueller, now seventy-nine years old, who also serves 
as keeper of these archives as well as chief of all security for the 
NSDAP, rejected this decision; when the courier reached the 
Buenos Aires international airport bearing these documents for 
me he was relieved of them by the Argentine secret police acting 
under an initiative from Mueller. 

As Mueller had explained previously, he had nothing against 
me personally; I had been cleared of any "strange connections" 
by his agents in New York City, whose surveillance efforts were 
supplemented by the old pros of the Gestapo up from South 
America to assist in watching me. This continued intermittently 
for years, and efforts were stepped up in response to the intensity 
of my investigations. The statement I had originally made to 
their representatives in West Germany, that I was only a dili- 
gent journalist trying to dig out an important story, finally 
proved satisfactory to them. I observed that Mueller hadn't lost 
his touch in the field of surveillance, judging by the quality, 
skill, and number of men and women who tracked me, at what 
must have been enormous cost, wherever I went in New York 
City, Washington, and overseas. In rejecting my request for a 
meeting with Bormann, and in intercepting the documents, 
Mueller sent word that other factors outweighed any consid- 
eration for me: the KGB, the CIA, and President Stroessner of 
Paraguay, "who just does not like inquiring reporters." I then 
got the information from West Germany that Israeli agents 
had somehow learned of my project, and they were also follow- 



273 



ing me. I asked one of the SS men if the Israeli exterior secret 
service, the Mossad, was good. His reply: "Yes, but they learned 
everything from us." 

So this is a facet of the secret world surrounding Reichs- 
minister Bormann in South America today. Many of his asso- 
ciates can travel back home under other names and false 
passports, and they do. General Hermann Buch, adjutant to 
Heinrich Himmler during World War II and Bormann's 
brother-in-law, was invited to address the "Old Comrades" of 
Das Reich Division at their annual reunion. He made his way 
from Buenos Aires to Rosenheim in West Germany, where he 
spoke, recalling the old glory days for them all. But Reichsmin- 
ister Bormann must ever remain in exile, although those who 
represent him bring credit to his organization and to the new 
Germany of today. Among the distinguished industrialists and 
financiers of the Society for the Promotion of German- Ameri- 
can Cooperation (including Latin America) who gathered three 
or four times a year in Frankfurt to listen to Julius Klein tell 
them what he was doing to promote their cause in the United 
States, were many representatives of the Bormann organization, 
links in the chain between German South America and the elite 
industrial power structure of West Germany. Even General 
Gehlen, when he was chief of the Federal Republic's intelli- 
gence service, sent his agents to confer with General Heinrich 
Mueller in South America. One West German business leader 
dear to the hearts of the Bormann group was Hanns-Martin 
Schleyer, a victim of abduction and murder by terrorists in 1977. 
He had been president of the West German employers and 
industry federation, and German newsmen called him "the top 
boss in the country." Schleyer, a brilliant administrator and a 
graduate in law from Heidelberg and Innsbruck, had joined the 
Nazi Party and the SS; in 1943, at the age of twenty-eight he 
became the administrative chief at headquarters of the industrial 
federation in Nazi-occupied Prague, charged with making the 
Czech economy productive for the Third Reich. After the war, 
he became an economic administrator, headed the foreign trade 
department of the Chamber of Commerce and Industry of 
Baden-Baden, and in 1951 joined the Daimler-Benz Company. 
Helped along by the support of Friedrich Flick and the shadowy 
men in South America, he became a member of the board o f 



274 



directors and handled labor relations and personnel. With 
Daimler-Benz as his managerial base, he became influential 
in the metal industry, and during a bitter labor dispute was 
instrumental in the lockout of 300,000 workers. 

As West Germany entered a period of attack by terrorists, 
Hanns-Martin Schleyer held no illusion that he might not be a 
target. He is reported to have written a memorandum months 
before his death, that were he captured by terrorists he would 
refuse to be traded for jailed extremists. When captured, the 
terrorists attempted just that, to exchange him for the release of 
eleven imprisoned comrades. There was no deal, and Schleyer, 
sixty-two, was found dead. 

The German-South American group also had direct access 
to the Nixon White House through their representatives in 
Washington, and were proud of the fact that Bebe Rebozo was 
President Nixon's closest friend. For, knowingly or unknow- 
ingly, Rebozo processed millions of their dollars through his 
Florida bank as part of normal commercial operations. They 
were also amused, perhaps flattered, that H.B. Haldeman, Nix- 
on's chief of staff, liked to refer to himself as the Martin Bor- 
mann of the White House. 

It amuses them too that the penetration of the American 
market is referred to as a German invasion, a blitzkrieg, so to 
speak — the term invented by the Nazis when they went to war 
in 1939. When Chancellor Helmut Schmidt, a former artillery 
officer on the Russian front, told U.S. Treasury Secretary W. 
Michael Blumenthal in 1978 that the United States should do 
more to put its economic affairs in order, they concurred with 
the advice, thinking it quite appropriate, as well as indicating 
the status enjoyed today by the Federal Republic of Germany. 
It views the establishment of factories in the United States as 
a welcome portent of German- American equality. The residents 
of New Stanton, Pennsylvania, are not so sure; they have wel- 
comed Volkswagen A.G. and the assembly lines that will pro- 
duce 200,000 Rabbits annually, yet their emotions are mixed. 
The mayor of New Stanton speaks of jobs and money being 
pumped into the local economy. Still, many say, "We know this 
is progress of sorts, but we also see coming traffic, pollution, and 
other problems. If we wanted to live in Detroit, we would have 
moved there." 



275 



Like the Japanese, the Germans appear to be exporting many 
of their polluting industries to the detriment of the environ- 
ment wherever they go. Concerned that host countries will be 
forced to institute protectionist measures against them, the 
Japanese are keeping a low profile, as do German entrepreneurs 
of the Rhineland, while they grope for the winning friendship 
formula to install them in the good graces of Americans. 

Americans today, particularly those old enough to have par- 
ticipated in World War II, may ponder at times as to who 
really won this struggle that cost so dearly. The entire world 
and the Federal Republic of Germany, to say nothing of Japan, 
have come a long way since the German surrender at Rheims 
and the Japanese capitulation aboard the U.S.S. Missouri. 

The memory of those days continues clear and present in 
today's Federal Republic of Germany. There are political divi- 
sions in the new republic, but there is a common unity over the 
question of the Third Reich and the crimes of Nazism: The 
German people and their leaders want to put away the past, 
"the darkest chapter of German history," as former Chancellor 
Willy Brandt declares, and move forward in a spirit of common 
reconciliation. Mr. Brandt told the editors of Der Spiegel, the 
West German newsweekly, at the occasion of an editorial round- 
table in June 1978, that "our people, of which millions became 
Nazis, cannot live with a wound remaining open ... it is not 
right that a people should be continuously burdened by some- 
thing in which they became entangled ... we must be aware of 
the differences among guilt and error and idealism that has 
become misused." He also remarked that "half of the people 
of Germany today were born after the war and they need not 
be concerned about the Nazi era. But the great majority of our 
people wish to put an end to the nonsensical theme of collec - 
tive guilt; an ending of the matter can, in my opinion, be done 
only on a morally unobjectionable ground, namely to hide noth- 
ing that happened, but also not be like the Pharisees, an 
ancient and notably self-righteous Jewish sect, which empha- 
sized strict interpretation and observance of doctrines and reli- 
gious practices." 

While Mr. Brandt urges "Let's forget the whole thing," 
mindful that the free world cannot exist divided against itself, 



276 



the former German chancellor is fighting an uphill battle. Jews 
the world over are determined that their persecution by the 
Nazis will not be forgotten, and in Washington, D.C., the 
powerful Jewish lobby pushed through the House a $2 million 
appropriation for a Nazi Crime Litigation Unit to investigate 
even at this late date 147 alleged Nazis, most of them non- 
Germans but East Europeans who had aligned themselves with 
the SS, who have lived in the United States for over twenty 
years. The work of this congressional investigative unit will go 
right on making occasional headlines, although not with the 
impact of the Holocaust book and TV series of 1978, which had 
been carefully timed as a Zionist reminder to the supportive 
American Congress of Jewish suffering, and thus a reiteration 
that Israel should be neither downgraded nor abandoned during 
an era critical in Middle East history. 

Further, the sometime headlined surfacing of Nazi concen- 
tration camp commanders such as Gustav Franz Wagner, who 
had been residing modestly for thirty-three years in Brazil, makes 
the Brandt spirit of reconciliation and amnesty more arduous. 
But inasmuch as it was Mr. Brandt and his government that 
provided Martin Bormann with what amounted to a "passport 
to freedom" in 1973 by stating that the former Hitler aide had 
perished in Berlin in 1945, it may be possible to achieve the 
philosophical unification he seeks for West Germany. 

While Germany's bankers were collectively responsible for t he 
financing of Hitler's war effort, the dean of them all is Hermann 
Josef Abs. Money was his life, and his astuteness in banking and 
international financial manipulations enabled Deutsche Bank to 
serve as leader in fueling the ambitions and accomplishments of 
Adolf Hitler and Martin Bormann. His dominance was retained 
when the Federal Republic of Germany picked itself up from 
the ashes; he was still there as chairman of Deutsche Bank, direc- 
tor of I.G. Farben, and of such others as Daimler-Benz and the 
giant electrical conglomerate, Siemens. Abs became a financial 
advisor to the first West German chancellor, Konrad Adenauer, 
and was a welcome visitor in the Federal Chancellery under Mr. 
Adenauer's successors, Ludwig Erhard and Kurt George 
Kiesinger. However, relations with Kiesinger chilled when in 
May 1969 he advised against revaluation of the West German 



277 



mark. Kiesinger thought this advice was responsible for his 
election defeat that year; but, more likely, it was his revealed 
Nazi background that did him in. 

Although top bankers of the world, even such as Abs, make 
their mistakes like everyone else, they operate in such insulated 
and rarefied milieus, that misjudgments are covered up. This 
was the case when Abs led the drive in the United States in the 
1960s to free German assets seized in World War II by retain- 
ing a Chicago press agent and lobbyist with close ties to mem- 
bers of Congress. 

Several of the new generation of West German bankers main- 
tain that Abs, now eighty- two years old and retired, has outlived 
his usefulness, although he is still respected for his past accom- 
plishments. One hip young German banker remarked, "He re- 
minds me of a perfume bottle that is empty yet still smells 
good." He added, "Politically speaking, bankers in Germany 
have been devalued." 

Yet Dr. Abs can never be devalued. In June of 1978 this 
adroit financier, considered by the majority of Germans to be a 
patriot, pulled off a coup noted around the world. Painstakingly 
and in secret, he headed up a West German consortium that 
snatched from the hands of speculators of other nations nearly 
$20 million of German art treasures to be returned to museums 
in the Fatherland; the achievement took place at Sotheby Park 
Bernet's London auction gallery. This fabulous collection had 
been the property of Baron Robert von Hirsch, a German-reared 
Jew who had fled with his treasures to Switzerland in the 1930s 
when the political situation was growing ominous. He died in 
Basel in 1977, aged ninety- four, and in his will ordered that the 
works of art be sold at public auction. Since the collection was 
of immense importance to German museums and to all cultur- 
ally and historically inclined Germans, federal, state, and art 
authorities turned to Hermann Abs for guidance in retrieving it 
all. It was he who planned the strategy and coordinated the 
winning bids. For his assault on Sotheby's he assembled a net- 
work of art dealers in several nations, according to Rudi Walther, 
a member of the Bundestag and of Abs's team. Most thorough, 
the German banker even calculated and prepared a set of spe- 
cial signals to cue his team of international buyers. "He put differ- 
ent strawmen to bid for each item on our list. Then he showed 



278 



them how to bid with the usual signals to prevent anyone from 
catching on, you know, stamping his foot, twitching his eye, 
raising a finger, and so on," Walther commented. 

Of the $20 million made available to Mr. Abs by West Ger- 
man federal, state, and museum authorities, the Abs bidders 
dispensed more than $19 million to bring back home these 
priceless works of early and later German masters. Interior Min- 
ister Gerhart Baum declared: "The preservation of these pre- 
cious art works for German culture is a good example of 
successful cooperation involving private donors, art experts, and 
federal and state governments." In addition, it was agreed 
among West German art professionals that recouping the von 
Hirsch collection was, to quote one of them, "the last oppor- 
tunity to preserve art objects of a unique quality for German 
culture." 

Today in Frankfurt, the many friends of Hermann Josef Abs 
agree that he has not lost his touch. 

Nor has Deutsche Bank, the largest in Europe and third 
largest in the world, lost its touch for international investments 
on behalf of its clients residing in West Germany and South 
America. It has bought two skyscrapers in Houston, Texas, the 
Pennzoil and the Shell buildings. As Vice President Ferdinand 
Krier of Deutsche Bank remarked, "Our clients believe American 
real estate is an attractive proposition at this time. Our goal is 
to offer interesting opportunities to our clients." 

One of the more stupendous investment opportunities cur- 
rently interesting this West German bank is the purchase of the 
massive World Trade Center in lower Manhattan. 

The economic unification of West Germany is complete, and 
if there is any doubt in Europe who in the long run won the 
peace there is none whatsoever among the former German 
leaders dwelling in South America. It is a good bet that if 
Hermann Schmitz were alive today he would bear witness as to 
who really won. Schmitz died contented, having witnessed the 
resurgence of I.G Farben, albeit in altered corporate forms, a 
money machine that continues to generate profits for all the old 
I.G. shareholders and enormous international power for the 
German cadre directing the workings of the successor firms. To 
all appearances he died in relatively reduced circumstances, in 
1960, at the age of seventy-nine, though immensely wealthy 



279 



during his lifetime. Any information about his fortune seemingly 
vanished with his death; but those who knew him believe it still 
exists. He was the master manipulator, the corporate and finan- 
cial wizard, the magician, who could make money appear and 
disappear, and reappear again. His whole existence was legerde- 
main, played out on the gameboard of I.G. Farben and his 
beloved Germany. The son of poor parents, born in Essen in 
1881, a loner who made it to the top through ability, diligence, 
hard work, and singleness of purpose, he resembled Martin 
Bormann, who likewise had more than just a feel for mathe- 
matics but never went beyond high school, and had to make it 
on his own. Their association was close and trusting over the 
years, and it is the considered opinion of those in their circle 
that the wealth possessed by Hermann Schmitz was shifted to 
Switzerland and South America, and placed in trust with Bor- 
mann, the legal heir to Hitler. 

Schmitz's wealth — largely I.G. Farben bearer bonds converted 
to the Big Three successor firms, shares in Standard Oil of New 
Jersey (equal to those held by the Rockefellers), General Mo- 
tors, and other U.S. blue chip industrial stocks, and the 700 
secret companies controlled in his time by I.G., as well as shares 
in the 750 corporations he helped Bormann establish during 
the last year of World War II — has increased in all segments of 
the modern industrial world. The Bormann organization in, 
South America utilizes the voting power of the Schmitz trust 
along with their own assets to guide the multinationals they 
control, as they keep steady the economic course of the Father- 
land. 

It is true that the resurgence of West Germany was due to 
hard work by its people, assistance from the Marshall Plan, an 
infusion of buying orders from the United States military estab- 
lishment during the Korean War, and a fair and free commer- 
cial enterprise system that enabled business and industry to 
wheel and deal in world markets and come up with profits and 
favorable trade balances for the new federal republic. The new 
Deutschmark has grown to high status as the envy of other 
currencies and the equal of the coveted Swiss franc. Allowing 
business to have its head was, to go back, the formula adopted 
by Hitler during the 1930s; he harnessed the people instead of 



280 



nationalizing industry and emphasized that German wealth for 
one and all depended on German production. 

But it is just as true that the river of wealth back into West 
Germany from assets sequestered by Martin Bormann and the 
corporations that participated in his brilliantly conceived pro- 
gram of flight capital was a major factor in the recovery of the 
nation — and the best-kept secret in all German history. The 
return of capital began slowly. As factories were rebuilt and 
revved up for production, money from Swiss banks representing 
their secret accounts flowed into the Rhineland. It was termed 
investment money, and the first corporations to enjoy its impact 
were those with demand products: automobiles, steel, and 
chemicals. Ferdinand Porsche, who designed the famed "Tiger" 
tank, redesigned Hitler's "people's car," the Volkswagen, and 
a new factory was erected to turn it out. Daimler-Benz shortly 
had its Mercedes cars and trucks rolling from the assembly 
lines, and as the giant industrial complexes geared once again 
for full production and business, the smokestacks of Essen told 
a story of full employment and the eagerness of workers and 
managerial staffs to get on with the job of climbing up from 
zero to total output. The Swiss bankers themselves, watching 
the funds they were directed to invest in these German indus- 
tries, also invested their own funds and those of their German, 
British, French, Belgian, Swiss, and American clients. One 
American occupation officer was advised by his Swiss banker to 
invest his modest army salary in West German automotive firms. 
"I gave him carte blanche with my account," said the officer, 
"and months later on a visit to Zurich I discovered my few 
thousand dollars had escalated to $250,000, and was still ap- 
preciating." Regrettably, a problem soon arose: following his 
discharge from the army and his return to the United States he 
couldn't declare his secret account, because he had consistently 
failed to include it on his U.S. tax returns. A pillar of his com- 
munity, he had to go abroad to spend these gains. 

Money continued to trickle into West German firms from 
the private investment sector during the late forties, but not 
until May 5, 1955, when the Federal Republic of Germany be- 
came a sovereign government and the Allied occupation forces 
had left, did the enormous sums shifted from the Third Reich 



281 



away from threatened Allied seizure become available to those 
groups in West Germany that had participated in Martin Bor- 
mann's program of flight capital. 

Some idea of the liquid assets that had arrived in bulk in 
South America during those chancy years was given me by an 
SS friend of Bormann who had worked closely with him. On 
one day alone, he recalled, while he was standing alongside 
Bormann and Mueller and others, he helped unload and list 
the contents of one courier pouch. He recorded in excess of 
$4.5 million in assorted currencies, diamonds, stocks, and bearer 
bonds representing blue chip corporations in Germany, Switzer- 
land, Spain, and the United States. 

His statement is believable when you consider the discipline 
and resourcefulness of a smart group determined to move assets 
from one country to another. It can be done even nowadays, as 
was illustrated during February 1979, when 25,000 Teheran 
Jews fled the Iranian capital with their own flight capital pro- 
gram. Those 10,000 who flew directly to Israel arrived at Lod 
Airport with treasure that strained the counting capabilities of 
Jerusalem banks as Jewish owners disgorged their liquid wealth. 
One Jerusalem bank manager reported a record one-day deposit 
of $72 million in thousand-dollar bills, and one Persian rug was 
declared to be worth $30 million when it was unrolled, revealing 
diamonds and gold stitched into the fabric. 

By 1956 the three major multinationals (Hoechst, BASF, and 
Bayer) reshaped from the 159 companies within Germany that 
had comprised I.G. Farben were generating record profits for 
the original 450 major Farben stockholders, who had organized 
themselves into the I.G. Farben Stockholders Protective Com- 
mittee in Bonn. The Big Three went on expanding, tripling 
capitalization in 1956 from investment funds that poured in 
from the interlocking companies established in safe haven 
countries by Martin Bormann and Hermann Schmitz. There 
was a return, more vigorous than ever, of the huge, monolithic 
industrial multinationals that dominated the German economy 
before and during World War II. 

Each of these three spinoffs from I.G. Farben today does 
more business individually than did Farben at its zenith, when 
its corporate structure covered 93 countries. BASF and Bayer 



282 



individually boast worldwide sales of nearly $10 billion annually, 
while Hoechst, now the world's largest chemical company, 
generated $16.01 billion in worldwide sales in 1980. Each does 
more business than E.I. du Pont de Nemours, with sales of 
$9.4 billion. The United States is, of course, the major market, 
one into which these German corporations continue to pour 
investment money for both new capital construction and cor- 
porate takeovers. BASF and Hoechst have each invested in 
excess of $1 billion in such expansions, and chief executive 
Herbert Grunewald of Bayer A.G. has said that they plan a 
$ 1 billion expansion in the United States within five to ten 
years. In Europe, Bayer A.G. is parent of some 380 subsidiary 
operations. In the United States, it controls Mobay Chemical, 
whose annual sales in 1978 of $779.5 million make it the Bayer 
group's most formidable foreign subsidiary. Miles Laboratories 
(maker of Alka- Seltzer), Chemagro, Rhinechem, Cutter Labora- 
tories, and Harmon Colors are additional Bayer A.G. interests 
in this country that Grunewald says he plans to double as part 
of his American expansion program. 

Together, these three multinationals assure permanent pros- 
perity for the original 450 Farben stockholders, their banks, and 
the shadowy shareholders of the Bormann organization in South 
America who guard and vote the Herman Schmitz trust fund 
through intermediaries at the annual meetings of BASF, Bayer, 
and Hoechst. 

At the most recent annual meetings of these three chemical 
giants, West German banks, while not holding substantial direct 
investments in these companies, voted proxies on behalf of 
more than 80 percent of the shares. Direct industrial holdings 
have long been accepted in West Germany as normal bank- 
industry ties. While the exact extent and size of a bank's hold- 
ings are a closely guarded secret, Hermann Beyer- Fehling of the 
Bonn Finance Ministry characterizes the banks as "the largest 
power with the most impenetrable connections," which is one 
reason the Bormann organization continues to grow in stature 
and strength. 

As German corporations have moved into the U.S. market, 
German banks have not been far behind, and in 1979 Deutsche 
Bank, the largest non- American bank in the world, opened its 



283 



doors in New York City, and will be a formidable competitor to 
American banks. A prime objective will be to service the needs 
of the growing number of subsidiaries of German and other 
European companies in the United States. But Deutsche Bank, 
which will not seek consumer deposits, intends to compete with 
America's largest banks for the entire range of corporate busi- 
ness, from handling companies' daily cash accounts and short- 
term borrowings to piecing together intricate multicurrency 
credits and, through a subsidiary, even underwriting corporate 
securities offerings. There is no doubt that the Deutsche Bank, 
with S79.9 billion in assets and more than 1,100 branches in 
Germany and elsewhere in the world, including fiscal strong- 
holds throughout South America, will be able to compete suc- 
cessfully in the U.S. financial market. 

As for Martin Bormann, this now elderly recluse is ever a 
keen watcher and manipulator in the silent, gigantic struggles 
among worldwide industrial and financial powers. Atop an orga- 
nizational pyramid that dominates the industry of West Ger- 
many through banks, voting rights enjoyed by majority 
shareholders in significant cartels, and the professional input of 
a relatively young leadership group of lawyers, investment spe- 
cialists, bankers, and industrialists, he is satisfied that he 
achieved his aim of helping the Fatherland back on its feet. To 
ensure continuity of purpose and direction, a close watch is 
maintained on the profit statements and management reports 
of corporations under its control elsewhere. This leadership 
group of twenty, which is in fact a board of directors, is chaired 
by Bormann, but power has shifted to the younger men who 
will carry on the initiative that grew from that historic meeting 
in Strasbourg on August 10, 1944. Old Heinrich Mueller, chief 
of security for the NSDAP in South America, is the most feared 
of all, having the power of life and death over those deemed 
not to be acting in the best interests of the organization. 

Some still envision a Fourth Reich. This is but the dream 
talk of aging adventurers who will soon pass from the mortal 
scene. What will not pass is the economic influences of the 
Bormann organization, whose commercial directives are obeyed 
almost without question by the highest echelons of West Ger- 



284 



man finance and industry. "All orders come from the share- 
holders in South America," I have been told by a spokesman 
for Martin Bormann. 

And, today, how fares Martin Bormann? After a unique life- 
time of struggle to the very top, then the years of hiding and 
being declared officially dead by the Federal Republic of Ger- 
many to absolve them from conducting a manhunt they have 
never been impelled to make, Adolf Hitler's heir lives a, life of 
ease. He resides in a luxurious estate on an Argentine estancia 
— a ranch, so to speak — in the province of Buenos Aires. Seven- 
teen percent of all land in this "Queen Province" belongs to 82 
family groups, 17 cattle and crop-raising companies, and 20 
smaller owners. One ranch comprises 260,000 acres, and a 
medium-sized spread is 120,000 acres. Aside from sheep, cattle, 
horses, and grain, and the peons who work the land, these 
estancias have their own railway stations, churches, hospitals, 
telephone and telegraph exchanges, and shops for a handful of 
people. The economic power of these propertied families is of 
course vast in their own milieu, but it is augmented in the capi- 
tal city of Buenos Aires. There the senior family member speaks 
for the rest in dealings with banks, investments, and industry, 
in Argentina as elsewhere, such as West Germany and the 
United States. 

To many of these family corporations the acknowledged 
benefactor is Martin Bormann, who brought a surge of new 
industry to Argentina in the late 1940s, making it possible for 
them to broaden and amplify their income base by linking them 
into banks, insurance holding companies, and the many indus- 
trial firms established by the newly arrived Germans with the 
vast sums he sent to Buenos Aires for safe haven. 

Bormann is as protected from seizure as the money and in- 
vestments he guards, for those he has benefited are grateful. 
Simon Wiesenthal, the famed hunter of Nazis, found this out 
when traveling to Buenos Aires in search of Bormann. He was 
told in no uncertain terms by the Jewish leadership there to 
cease stirring up trouble, and to leave the country, which he 
did. On a directive from Bormann, Jewish and gentile bankers 
and businessmen alike are represented in the management of 
German- Argentinian firms, as well as in other West German 



285 



corporations in Brazil, Chile, Bolivia, Paraguay, Ecuador, and 
Mexico. For these reasons, and because he was not personally 
involved in the Holocaust, the Israeli intelligence service no 
longer has an interest in the capture of Martin Bormann, who 
they too know is alive and well in South America. Mengele, the 
infamous doctor of Auschwitz, is another matter. If they could 
reach into Paraguay and spirit him away without causing inter- 
national political and commercial repercussions, they would do 
so. 

At eighty, Bormann is preoccupied with writing his memoirs. 
Not being a man of intellectual depths, however, he tires quickly 
of this self-appointed task. He knows that within himself he has 
a revealing and historically important story to tell, but he simply 
cannot get all the right words out. He writes with pencil, and his 
writing is quickly typed into manuscript form by an elderly 
female secretary. Nothing is ever completed, but the pages 
pile up, and he knows words are his limitation. 

If he were working on action-packed directives, as he did 
during the years of the Third Reich, or checking the bottom line 
of balance sheets to learn the profits and losses of the 750 cor- 
porations he established in his flight- capital program, he would 
be the effective man of action, a man in his right milieu. 

His thoughts of the past and present are coherent. He speaks 
of Albert Speer with disdain, saying that this "technocrat which 
we [Hitler and Bormann] made is a traitor to the party. His 
memoirs twisted the history of those days out of all proportion." 
As for Adolf Eichmann, he tells his intimates, "I told him to 
leave Buenos Aires and establish himself somewhere in the 
interior. He was always a magnet for Jewish kidnappers seeking 
symbolic retribution." 

The nearest he ever got to one of Himmler's concentration 
camps was the set of photographs (blown up to eleven-by- 
fourteen inches) presented to him and the Fuehrer by Reinhard 
Heydrich some months after he had opened the first concentra- 
tion camp on orders from Goering and Himmler. The sight of 
the dead and near-dead rocked Hitler, and the Reichsleiter had 
to lead him away from the conference room. Heydrich, a real 
butcher who reveled in his task, was never invited to the 
Fuehrer's headquarters again. Bormann remembers this incident 



286 



clearly but seldom speaks of it. He wants to include in his mem- 
oirs something on why the Jews were treated the way they were, 
but somehow the words won't come. Perhaps it has to do with 
the psychological barrier that surrounded the Fuehrer's head- 
quarters in those days. Some knew what was happening; others 
made it a point never to inquire. Even Field Marshal Erwin 
Rommel, during the collapse of Warsaw, turned a blind eye to 
the deportation of Polish Jews whose fate, once deported, did 
not occur to him, and he was soon lost in the frenzy of pre- 
paring to attack France and the lowlands at the head of his own 
Panzer division. Bormann also had his ever-expanding role to 
play and he found it convenient to know that the matter was 
a "Himmler problem." 

Yet the emotional scars are there, the bad memories mixed 
with the good. His vast living room on his Argentinian-pampas 
ranch is decorated with good mementos of those days: the 
Rembrandts and Diirers and other fine paintings that he had 
purchased or acquired as gifts over the years for Adolf Hitler. 
In his will, dictated and signed on April 29, 1945, in the Fuehrer- 
bunker in Berlin, Hitler instructed Reichsleiter Bormann to 
keep custody of the paintings, although he expressed the wish 
that they be placed in an art gallery in his native town of Linz. 
Realizing that this was not practical long before these last days 
of Hitler, Bormann had had the Hitler art collection crated 
and shipped to South America. Bormann knew that otherwise 
they would be seized by the Allies, and he regarded the paintings 
as among the treasures of the Third Reich that should likewise 
find a safe haven, along with the other forms of wealth he had 
been responsible for as party treasurer. 

The ruthlessness that characterized Martin Bormann when 
he served Hitler and the Third Reich as Reichsleiter did not 
disappear when he made it to South America. Everyone wanted 
in on the wealth, but he sat on it like the chairman of a bank. 
"It belongs to the party, and I am the party treasurer," he would 
say, and unless sums requested contributed to the growth of 
corporate entities that his organization controlled, the money 
would remain in the banks. He wanted no layabouts, and the 
news soon spread that he was a tight-fisted leader. 

One of the few Nazis in exile who never looked to Bormann 



287 



for money was Dr. Mengele, of Auschwitz notoriety. He was 
independently wealthy from his family-owned tractor business 
in Germany, which had a related assembly plant in Argentina, 
and this provided all the means a man in hiding would ever 
need, especially in Paraguay. 

Bormann can still be a man of towering rages, and when this 
happens his associates walk quietly until the mood subsides. 
Some Nazi-army veterans in West Germany are occasionally 
beguiled by tales of wealth to be had in South America. A story 
involving ninety-five tons of gold, supposedly controlled by an 
Adolf Hundhammer in Bolivia, became part of the journalistic 
legends of 1966. It was read with interest by an officer of the 
Gehlen espionage security forces, who then had himself assigned 
to South America on a temporary basis. He met with General 
Mueller but not Bormann, then went in quiet search of this gold 
treasure. Bormann heard about it from Mueller, exploded, then 
issued an order for termination. The officer was never seen 
again. As Bormann reasoned, if the Gehlen agent failed to find 
the gold, he would begin ferreting elsewhere, and who knew 
what that could lead to. 

Martin Bormann speaks wistfully of returning one day to 
the Federal Republic, but realist that he is, he accepts that this 
can never be. He did return to Europe in secret for a brief 
period in 1948, proceeding first to Spain, then to Switzerland, 
where he attended to some of his numbered secret accounts in 
Swiss banks. He traveled as Monsignore Augustin von der Lange- 
Lanbach, on a forged Vatican passport. Once his new banking 
arrangements had been concluded, he visited the grave of his 
wife in the monastery of Merano in northern Italy, then re- 
turned to Buenos Aires. 

He enjoys small intimate parties these days in his well-guarded 
pampas home and discussions with his old comrades about the 
war, which was lost by such a narrow margin. Winston Chur- 
chill's great qualm in 1944 was that Hitler would suddenly 
withdraw into Germany all along the perimeters of his defense. 
The result might have been a fortress Germany, marking time 
for an expanded arsenal of new and terrible weapons to appear, 
which would have turned the tide finally for Hitler. Bormann 
refers to this today, emphasizing that it was fatally unfortunate 
that the Fuehrer did not follow this specific advice of his Gen- 



288 



eral Staff. In fact, when Hitler refused, and his forces suffered 
twin defeats in the Falaise Gap of Normandy and at Kursk in 
the Ukraine, Bormann knew the war was lost, and took the 
steps he did, ultimately, to assure an economically resurgent 
Germany. 

As the Fuehrer in exile guards the party treasury, and keeps a 
close eye on the investments and corporations controlled 
through stock ownership by the organization, the leadership in 
position today remains relatively young and viable. It is run as 
a tight operation insofar as expenses are concerned, and the 
team of accountants and business representatives who travel 
twice yearly to Europe to check things out must detail all ex- 
penses in the manner of normal corporate procedures anywhere. 
This team of traveling auditors is accompanied by a covey of 
protective security guards provided by SS General Mueller, who 
enjoys to this day the title of Reich minister of the interior in 
exile. His teams range far afield, even to the United States, when 
bottom lines are to be checked out and on-site investments 
evaluated. It is said that General Mueller is utterly paranoid 
about his possible capture, which is not quite true. As a former 
inspector of detectives in Munich who became an old Gestapo 
hand when selected for the job by Heydrich, he learned total 
caution early, and that is the principle by which he lives today. 

As security chief for the Nazi organization in South America 
and Europe, General Mueller keeps a close eye on the leader- 
ship and on those he feels might threaten them. Israeli agents 
who move too closely to these centers of power are eliminated. 
One such termination was Fritz Bauer, formerly attorney gen- 
eral for the State of Hesse in Frankfurt, a survivor of Auschwitz 
and the man who tipped off the Israeli Mossad about the pres- 
ence of Adolf Eichmann in Buenos Aires, was killed on orders 
of General Mueller. His body was found in his bathtub and 
listed as "death by heart attack" by the Frankfurt police. The 
real cause: cyanide spray that induces heart stoppage without 
detection; the same modus operandi that Mueller used to kill 
the Bormann stand-ins who were placed in the Berlin freight 
yards in late April 1945. Mueller's ruthlessness even today is 
what deters Artur Axmann from altering his testimony that he 
saw Bormann lying dead on the roadway the night of their 
escape from the Fuehrerbunker, May 1-2, 1945. This story had 



289 



been composed by Mueller. To this day, Axmann, the only 
so-called living witness to the "death" of Bormann in Berlin, 
knows his life is in jeopardy if he reverses himself. General 
Mueller is thorough and has a long memory, and for a Nazi 
such as Axmann to go against Mueller's original directive would 
make him a traitor; retribution would surely follow. When I 
questioned one SS man who had once worked closely with 
Bormann in South America about the Axmann testimony, he 
said, "Axmann knows Bormann is in South America. I don't 
know why he persists in lying about the fact." He thought a 
moment, then went on, "But perhaps he wants to go on living, 
which is reason enough." 

When these old comrades meet in business and social ses- 
sions, they express the hope that one day they can return to the 
Fatherland. Bormann the supreme realist knows in his heart 
that this can never be. His social gatherings involve interesting 
people, including the Jewish business leaders who have served 
him well, and who in turn are comfortable indeed. As one Nazi 
expressed it in a fit of pique, "Bormann would rather be with 
rich Jews than poor Nazis." 

Count Zichy-Thyssen, grandson of old Fritz Thyssen, is 
looked upon with affection by Martin Bormann, who visits the 
Zichy-Thyssens upon occasion. Bormann's eldest daughter is said 
to be almost a permanent guest at the Thyssen ranches. As with 
the eldest brother, Adolf Martin, the former Jesuit priest, Mar- 
tin Bormann strongly wanted at least these first of his children 
with him in South America. Adolf, accompanied by his wife, 
visits his father from time to time. Daughter "Neumi" never 
married and devotes herself to her father in his declining years. 

Along with the good life, there is no lessening of safeguards. 
They have been on the run for so many years that it is part of 
their intrinsic survival pattern to question all strangers and any 
overtures. Even the Zichy-Thyssens, who in no way participated 
in the rise and fall of the Third Reich as did grandfather Fritz, 
evidence anxiety when approached by me with courteous ques- 
tions regarding the history of their family and further details 
about the life and career of Fritz Thyssen. 

Helmut Schmidt, as chancellor, has stated: "It will take fifty 
years to forget the Nazi past." The Nazi issue indeed rises 



290 



periodically even nowadays, yet there is every indication of a 
growing tolerance of the several million who joined the party 
before and during World War II but who did not participate 
in the excesses of the SS and the concentration camps. In May 
1979, Karl Carstens was elected president of the Federal Repub- 
lic of Germany; this choice of the electorate followed election 
of the previous president, Walter Scheel; both were former 
Nazis. 

Pervasive unease remains a characteristic of the nation, de- 
spite the stunning material achievements and its enviably solid 
economy. Perhaps this insecurity has its roots in memories of 
two sweeping defeats in this century, as well as the strain of 
having to live with the secrets of the Martin Bormann program 
for more than four decades, the secrets that enabled the West 
German leadership to stage one of history's most resounding 
comebacks in the arena of international commerce. 

Martin Bormann knows this to be so, and confides to his inti- 
mates that while he can never return to Germany, his lines of 
communication remain ever open.. This man, who legally suc- 
ceeded Hitler and therefore is the leader of over several million 
NSDAP members in South America and Germany, demon- 
strated the ultimate in clout in 1971, when he summoned the 
president of the Federal Republic of Germany, then Walter 
Scheel, and the latter's wife Mildred, to Bolivia, whence they 
quickly returned to Europe with a newly adopted one-year-old 
boy who bore the first name Simon-Martin. The child, now 
eleven years of age, is being reared and educated in one of 
Germany's most influential families. The belief is, of course, that 
he is a son of Martin Bormann, who insisted that this child of 
his old age be brought up as an upper-class German in his 
Fatherland and receive appropriate advantages befitting a son 
of the leading Nazi. 

Is Martin Bormann proud of his achievement? Indeed he is. 
A man of many moods, which can be traced to an exile of 
thirty-five years from his homeland, and suffering the physical 
vagaries that go with a robust but eighty-year-old body, he turns 
cheerful when commenting on the economic leadership of the 
Federal Republic of Germany. He didn't do it all, he admits, but 
the economic bastions of power that he established in the neu- 



291 



tral nations of the world in 1944 were the bedrock enabling the 
West German government to rise from defeat, once they had 
again become masters of their destiny after the Treaty of Paris 
in 1954. 

The Bormann organization continues to wield enormous eco- 
nomic influence. Wealth continues to flow into the treasuries 
of its corporate entities in South America, the United States, 
and Europe. Vastly diversified, it is said to be the largest land- 
owner in South America and through stockholdings controls 
German heavy industry and the trust established by the late 
Hermann Schmitz, former president of I.G. Farben, who held 
as much stock in Standard Oil of New Jersey as did the Rocke- 
fellers. 

In 1980 Chancellor Helmut Schmidt said West Germany was 
the greatest commercial and financial power in the world today 
after the United States. He declared that West Germany's eco- 
nomic strength was its essential international lever. "For some 
years now our economic policy had been simultaneously our 
foreign policy." 

This theme delights Bormann as he talks with intimates in 
the well-guarded privacy of his pampas ranch house. A former 
CIA contract pilot, who once flew the run into Paraguay and 
Argentina to the Bormann ranch, described the estate as remote, 
"worth your life unless you entered their air space with the 
right identification codes." Count Federico Zichy-Thyssen, 
grandson of old Fritz Thyssen, Claudio Zichy-Thyssen, and 
their families are intimate friends of Bormann. Because of this 
friendship, Martin Bormann has three sanctuaries: his own 
pampas spread in Argentina and the Thyssen ranches in Argen- 
tina and Paraguay. 

His eldest daughter caters to his wishes and sees to his com- 
fort. "Neumi" possesses a collection of diaries and photographs 
from her childhood to the present. One picture, taken when she 
was two years old in Germany, is today simply captioned, 
"Daddy trimming the Christmas tree, 1942." 

Always behind her is the guiding hand of General Heinrich 
Mueller, the gray eminence of security for the NSDAP and its 
leader in exile. For Neumi is officially listed as dead, a device 
that has been utilized six times by Mueller on behalf of Bor- 
mann, according to the Israeli Mossad. 



292 



In a lifetime of struggle, vast power, and escape, Martin 
Bormann in his last years can point to one unchallengeable 
accomplishment: with the war lost, the goal he envisioned on 
August 10, 1944, a postwar commercial campaign aimed at 
bringing Germany back to the forefront of world economic 
leadership, is won. 



293 



INDEX 



Abs, Hermann Josef, 67, 69, 72, 

74, 86, 87, 261, 269, 277-79 
Adenauer, Konrad, 13, 115, 

235, 269, 277 
Adolf Hitler Endowment Fund 

of German Industry, 43-44 
Albensleben, Hans Rodo von, 41, 

42 

Altaian, Klaus (Barbie, Klaus), 
211 

Ardennes, 131 

Argentinian Secret Police, 205- 
09 

Arnold, Elting, 149 
Arnold, General Henry H. 

("Hap"), 107 
A.T.&T., 76 

Auslands-Organisation, 51-53 
Avieny, Wihelm, 68 
Axmann, Artur, 177, 289, 290 

Badoglio, Field Marshal Pietro, 
63 

BASF (Badische Anilin und 

Soda-Fabrik), 282, 283 
Bauer, Fritz, 289 



Baumann, Hans, 219 

Bayer, Friedrich, &Co., 58, 83, 

148, 161, 220, 251, 283 
Beaverbrook, Lord, 103, 115 
Bell Laboratories, 76 
Below, Nicholaus von, 169 
Ben-Gurion, David, 195 
Bergold, Friedrich, 15 
Bernadotte, Count, 168 
Besymenski, L., 13 
Bigart, Homer, 110 
Big Three, 258 
Blaschke, Hugo, 16, 182 
Blumenthal, Michael W., 275 
Blye, P. W., 76 
Boernicke, Helmut, 67 
Bohle, Ernst Wilhelm, 51, 53 
Bohlen, Krupp von, 42 
Bolat, Gerhard, 12 
Bormann, Adolf Martin, 18, 290 
Bormann, Albert, 15, 39 
Bormann, Gerda, 18, 40, 45, 288 
Bormann, Neumi, 290, 292 
Bosse, Dr., 26, 27 
Boussac, Marcel, 31 
Bracken, Brendan, 48, 49 



297 



Brandt, Willy, 15, 261, 276, 277 
Braun, Eva, 16, 44, 45, 162, 169, 

171, 172, 175 
Brombacher, Hermann, 81, 82 
Brooke, Alan, 95 
Brown, Anthony Cave, 108, 109 
Bruce, David, 92 
Buch, Hermann, 274 
Buch, Walter, 40, 45 
Buna Process, 55, 153 
Buschwerke, 25 
Bussing, 25 

Butting (Auslands-Organisation 
leader), 52 

Cadogan, Alec, 94 
Carroll Gibbons Orchestra, 101 
Canaris, Wilhelm, 76, 84, 251 
Carstens, Karl, 291 
Casablanca Conference, 107 
CBS News, 19, 272, 273 
Charlotte, Grand Duchess of 

Luxembourg, 154-55 
Chase Bank, 71, 72, 139, 205 
Chemie, I. G, 117, 119, 159 
Churchill, Clementine, 49, 50, 

103 

Churchill, Diana, 49, 50 
Churchill, Mary, 49, 50 
Churchill, Sarah, 49, 50 
Churchill, Winston, 12, 47, 48, 

50, 63, 76, 82, 83, 90, 92-95, 

99, 105-06, 109, 112, 116, 165, 

166, 191,251 
CIA, 13, 16,211-13,273 
Ciano, Count Galeazzo, 149 
Clay, Lucius D., 180 
Commerzbank, 33,43, 53, 

67, 70, 78, 80, 135, 258 
Cronkite, Walter, 101, 110 

Dahl, Hauptman, 142, 143 
Daily Express (London), 17 
Daniels, Ray, 101 



De Gaulle, Charles, 63, 71, 103, 
104 

De Guingand, Francis, 108, 109 
De Loes, Charles, 160 
De Fortes, Helen, 99 
Degrelle, Leon, 202 
Denton, Scott, 110 
Deutsche Hilfsverein, 198, 199 
Deutsche Sudamerikanische 

Bank, 58, 59, 137 
Deutsche Bank, 3, 43, 53, 59, 

65-70, 72-75, 78, 79, 83, 84, 

118, 135, 137-39,155, 160, 161, 

205, 239, 244, 258, 277, 279, 

284 
Dieppe, 95 
Dirksen, Everett, 269 
Dodd, Thomas J., 265, 269, 270 
Doenitz, Grand Admiral Karl, 

14, 104-07, 167, 168, 170-73, 

179, 183-85 
Donovan, William J., 91, 92, 146, 

222 
Dornier, 67 

Dresdnerbank, 33, 43, 53, 54, 58, 
67-70, 78, 79, 83, 155, 137, 155, 
258 

Dulles, Allen W., 91, 92, 251, 
253, 254 

Eaker, General Ira, 107, 109, 110 
Echtman, Fritz, 16, 182 
Eden, Anthony, 47,82,83 
Eichmann, Adolf, 14, 200, 201, 

210, 227, 286, 289 
Eisenhower, DwightD., 115, 

165-67, 183, 184 
El Fenix Sudamericano Cia., 149 
Ellis, Charles Howard, 76, 77 
Erhard, Ludwig, 235, 277 

Fainsode, Merle, 14 
Farben, I.G, 28, 32, 33, 42, 44, 
54-59, 67, 69, 81, 83-85, 114, 



298 



117, 118, 132, 134, 147, 148, 
153, 156-58, 160, 220, 257, 
277, 280, 282-83 

Federal Communications Com- 
mission, 223 

Felisiak, Juan, 206, 208, 210 

Fest, Joseph C, 46 

First, William, 251,252 

Fischbock, Hans, 75 

Rick Friedrich, 153, 236-39, 241, 
271 

Ford Motor Company, 85, 86 
Four-Year Plan (German), 75, 

78,95 
Franco, Francisco, 84 
Frank, Hans, 189 
Franke, Christian, 68 
Frankfurter, Felix, 93 
Friedeburg, Admiral von, 183-84 
Friedman, Elizabeth, 223 
Friedman, William, 223 
Freudenberg, Richard, 157 
Frezza, Pino, 205, 208 
Frick, Wilhelm, 189 
Funk, Walther, 44, 69 



Gauff, Horst, 17 

Gehlen, Reinhard, 13, 180, 212, 

274,288 
Geisler, Paul, 170 
General Aniline &Film, 159, 160, 

265 

General Motors, 66 

George VI, King of England, 48 

German-American Bund, 53 

German Marshall Fund, 261 

Giese, Walter, 225 

Gisevius, Hans Bernd, 251 

Gissling, Dr., 53 

Goebbels, Joseph, 29, 44-46, 51, 

145, 166, 167, 169, 171, 172, 

218, 242 
Goering, Hermann, 29, 42, 44- 



46, 144, 145, 159, 167, 168, 170, 
191,242,243,248,254,286 
Grace, Peter W, 241 
Grace, W. R & Co., 240, 241 
Greim, Rittervon, 171-72 
Greutert, Edouard, 115-18 
Guderian, Heinz, 140, 149 



Hamburg-Amerika Line, 25, 43, 

79, 133 
Hamilton, Duke of, 47-48 
Hanke, Karl, 170 
Hess, Rudolf, 43, 45, 47-49, 51, 

90, 92, 243, 251 
Heusemann, Kaete, 182 
Heuser, Karl Heinz, 68 
Heydrich, Reinhard, 46, 89, 91, 

159, 167, 170, 180, 191, 200, 

286 

Hill, Gladwin, 110 

Himmler, Heinrich, 29, 43-45, 
63, 64, 87, 88, 90-92, 153, 159, 
166-69, 175, 191, 254, 272, 274, 
286 

Hindenburg, Paul von, 42 
Hirohito, Emperor, 120-28 
Hiroshima, 126 
Hirschweh, Peter Edel, 181 
Hitler, Adolf, 28, 29, 37-39, 42- 
47, 51, 56, 57, 73, 77, 84, 85, 
87, 92, 93, 102-04, 113, 117, 
125, 126, 131, 140, 166-74, 182, 
191, 198, 204, 259, 254, 286, 
287 

Hoechst (Farbwerke vorm. Meis- 
ter Lucius und Bruening), 257 

Hofer, Andreas, 145 

Hoffmann, Heinrich, 44 

Hoover, J. Edgar, 204, 205, 215- 
17, 219-21 

Hopkins, Harry, 93 

Humphrey, Hubert H., 269 

Huncke, Heinrich, 68 



299 



Hundhammer, Adolf, 288 

Ilgner, Max, 54, 57, 120, 158 
Interhandel, 159, 160 
Irving Trust Co., 139 

Jackson, Robert H., 204 

Jander, Walter, 68 

Javits, Jacob, 269 

Jodl, General Alfred, 183-85, 190 

Kaltenbrunner, Ernst, 141, 144, 
189 

Keating, Kenneth, 269 
Kehrl, Hans, 73 
Keitel, Wilhelm, 47, 172, 189 
Kennedy, Robert F., 161 
Kesselring, Field Marshal Albert, 
141 

KGB, 13, 273 
Kido,, Koichi, 121-28 
Kiesinger, Kurt George, 277-78 
Kirdorf, Emil, 41 
Kitzmiller, Oden Lester, 273 
Klarsfeld, Beate, 211 
Klein, Julius, 265-70, 274 
Koenigs, Gustav, 79 
Kollek, Teddy, 195 
Kolonie Waldner, 214 
Kriendler, Mac, 110 
Krupp, 25, 58, 81, 83, 132, 237 

Lazard Freres, 72 
LeLong, Lucien, 31 
Levitt, William, 195 
Lewis, Flora, 271 
Ley, Robert, 46, 189 
Link, Edwin, 143, 144 
Lukacs, John, 52, 100 
Lusitania, 115, 116 

MacArthur, Douglas, 124, 12 
Mandl, Fritz, 148 



"Magic" (U.S. code breaker), 

122, 126 
Maier, Julius, 68 
Manufacturers Hanover Trust, 

139, 205 
Marshall, General George C., 

166, 234 
Marshall Plan, 19, 147 
Martin Bormann Nazi Party 
Committee on Banking, 67-68 
Marty, Georg Wilhelm, 58, 59 
Mathes, Robert C, 76 
Mendel, Bernhard, 220 
Mengele, Josef, 207, 209, 210, 

213, 286, 288 
Menzies, Stewart Graham, 76, 

146 

Merkers "Trove," 232 
Messerschmidt, Willy, 25, 236 
Middleton, Drew, 101 
Miedel, Alois, 144, 145 
Mitsui, 28 

Model, Field Marshal, 158 
Moffet, Jay Pierrepont, 93 
Morgan Guaranty Trust, 71, 72, 
139 

Morgenthau, Henry, 93, 149 
Mossad, 177, 180, 183, 209 
Mueller, Heinrich, 11, 17, 76, 77, 
87-90, 92, 140, 141, 175-77, 
179, 180-83, 185, 192, 193, 
196-200, 202, 211-13, 215, 254, 
272-74, 282, 284, 288-90, 292 
Mundt, Karl, 269 
Munich Reinsurance Co., 80, 149 
Murrow, Edward R, 18, 101, 102 
Mussolini, Benito, 63, 149, 172 

Nagasaki, 126 
Nasser, Colonel, 212 
National City Bank 139, 159, 205 
NBC News, 215 
Neuhausler, Johannes, 15 
Nixon, Richard M., 174, 275 



300 



Nixon, Russell A., 156, 231, 232 
Norden bombsight, 107, 108 
Norddeutscher Lloyd, 43 
Nuremberg Trials, 12, 15, 58, 72, 
127, 190-92, 200, 205 

ODESSA, 193-96, 198, 209 
Ohnsorge, Dr., 77 
O.I W. (German High Com- 
mand), 81 
O.K.W., 84 
Oldfield, Barney, 236 
Operation Bear, 91, 93 
Operation Overlord, 94 
Oshima, Hiroshi, 121 
Osram, 134 

OSS, 91, 92, 126, 146, 219, 220, 
222, 223, 245 

Pannwitz, Heinz, 89, 90 

Papen, Franz von, 42 

Patton, General George S., 115, 

157, 165, 166 
Pauley, Edwin W., 123 
Paznanska, Sophie, 89 
Pearl Harbor, 71, 94, 125 
Pehlejohn, 150, 151, 153 
Perez, Richard Henry, 273 
Peron, Juan, 203-05, 211, 221 
Philby, Kim, 91 
Phillips of Eindhoven, 75, 77 
Pierce, Lawrence Walter, 275 
Pompidou, Georges, 104, 211 
Porsche, Ferdinand, 236, 281 
Post, Robert, 110, 111 
Potter, Ralph K, 76 
Pyle, Ernie, 101 

Qadhafi, Colonel, 212 

Rafelsberger, Walter, 68 
Rebozo, Bebe, 275 
Red Orchestra, 91 
Reitsch, Hanna, 171, 172 



Resistance (French and Belgian), 
73 

Reston, Scotty, 101 
Reves, Emery, 244 
Reynaud, Paul, 99 
Ribbentrop, Joachim von, 87, 91, 

137, 145, 173, 189 
Richter, Wolfgang, 68 
Rochling, Hermann, 28, 134 
Rommel, Field Marshal Erwin, 

173, 174, 287 
Rooney, Andy, 110 
Roosevelt, Franklin D., 50, 63, 71, 

76, 82, 93, 94, 109, 166, 170, 216 
Roper, H. Trevor, 12, 14, 16, 38, 

176-78 

Rossbach, Gerhard (Freikorps), 

40, 252, 253 
Rothschild Freres, 68, 72, 104, 

144, 154 

Sachsenhausen, 17 
Schacht, Hj aimer, 212, 251 
Schaefer, Alfred, 160 
Scheel, Walter and Mildred, 291 
Scheid, Dr., 23-26 
Schellenberg, Walter, 39, 87, 167 
Schieber, Walter, 68 
Schleyer, Hanns-Martin, 274, 275 
Schmidt, Helmut 259, 275 290, 
292 

Schmidt, OMS, 146, 148-54 
Schmitz, Hermann, 42, 66, 67, 
113-18, 120, 122, 132, 135, 
157-59, 161, 279, 280, 282, 292 
Schnitzler, Georg von, 28-29, 42 
Schroeder, Kurt von, 42, 44, 69, 
73-74 

Seyss-Inquart, Arturvon, 173, 190 

Shawcross, Lord, 72 

Siemens, 44, 66, 82, 85, 134, 148, 

156, 259, 277 
Simpson, Colin, 116 
Skorzeny, Otto, 63, 212 



301 



Smith, Walter Bedell, 184, 232, 
233 

Sognnaes, ReidarF., 16 
Sohl, Hans-Gunther, 256 
Spaatz, Carl A., 107, 112 
Speer, Albert, 28, 38, 41, 45, 56, 

64, 113, 168, 226, 286 
Standard Oil, 28, 159 
Stars & Stripes, 196 
Stalin, Josef, 46, 49, 63, 82, 88, 

91-94, 166 
Stephenson, William, 76, 77 
Stroessner, President, 215, 273 
Strossner, Dr., 25 
Stumpfegger, Ludwig, 16, 176 
Sturzenegger, Hans, & Co., 118, 

135, 160 
Sullivan and Cromwell (law firm), 

253 

Summersby, Kay, 184 

Taft, Robert A, 190 
Taylor, Telford, 190 
Tefs, Rudolf, 53 
Teheran Conference, 93, 95 
Textile Mills Securities, 264 
Thyssen, August, 246, 247, 263, 
264 

Thyssen, Fritz, 41, 148, 156, 160, 
161, 237, 242-48, 250-57, 262, 
263, 290, 292 
Thyssen-Bomernisza, Heinrich, 

237, 262, 263 
Tojo, Hideki, 125 
Trevenfels, Hermann von, 40 
Trepper, Leopold, 88-90 
Truman, Harry S., 123, 194, 204 
Truscott, Lucian K., Jr., 115 

Ulbricht, Walter, 178 
"Ultra" (code breaker system), 
105, 106 



U-20, 116 

Unione Corse, 143 

U.S. -Japan Foundation, 262 

Versailles, Treaty of, 24 
Vetterlein, Herr, 77 
Vereignigte Glanzstoff, 73, 74 
Vereinigte Stahlwerke, 59, 79, 

132, 249, 250 
Vlissinger, Fentner van, 73-74 
Volkswagen, 25, 236, 259, 275, 

281 

Wade, William, 110 
Wagner, Walter, 171 
Wallenburg, Jacob, 133, 151 
Wallenburg, Marcus, 133, 151 
Wallenburg, Raoul, 151 
Wendland, Hans, 145 
Wenzel, Johann, 89 
Westrick, Ludger, 270 
Wiitney, Jock, 110 
Wiedemann, 53 
Wiesenthal, Simon, 14, 16, 17, 

183,285 
Winterhilfe, 44, 59 
Wolff, Karl, 44 
Woollcott, Alexander, 102 
Worms &Cie., 71, 140 
'Writing 69th," 110 

X System, 76 

Yalta Conference, 166 
Yamamoto, Admiral, 125 
Yokohama Specie Bank, 122 

Zichy-Thyssen, Claudio, 257, 292 
Zichy-Thyssen, Federico, 237, 242, 

257, 262, 290, 292 
Zhukov, Marshal Georgi, 167 
Zichy, Countess, 246, 257 



302